Arrivalderci Silk Road: Italy abandons Chinese project In the city of Lugano you can now pay with Bitcoin

The beginning was full of pomp and circumstance: red carpet, guard of honor, helicopter in the sky.

In March 2019, then-Italian Prime Minister Giuseppe Conte and Chinese state and party leader Xi Jinping signed an agreement at the Villa Madama in Rome under which Italy would be the first major Western country to participate in the Chinese mega-project of a “New Silk Road” .

The end four and a half years later was very gentle: according to Italian media reports, Rome informed about the exit with a formal diplomatic note. There was official silence on the issue on Wednesday.

From the official residence of current Prime Minister Giorgia Meloni, who has been heading a government of three right-wing parties for just over a year, the only answer as he left the Via Della Seta (Silk Road) was: “No comment.” At least there was some confirmation from its Foreign Minister Antonio Tajani. “We saw that the Silk Road did not have the expected effects,” he said at an event organized by Adnkronos news agency.

Launched ten years ago, the “New Silk Road” is a global investment and infrastructure project of China. The initiative includes land and sea projects that are part of the “Maritime Silk Road”.

Because of the project, Italy, which was struggling with a chronic debt burden, faced a lot of criticism from its Western partners. Italy was the only country from the Group of Seven democratic economic powers (G7) that decided to participate, and also the only major country from the EU. This was justified by better export opportunities, with the hope of investments – for example for the ports of Trieste and Genoa – and also of even more Chinese tourists.

China, in turn, as the second largest economic power, wants to open new trade routes around the world, on land and sea. “New Silk Road” is derived from the world-famous ancient trade route that extended to Europe. Beijing has now invested almost a trillion euros in the project. In many developing countries, roads, railways, airports and seaports sprang up where they did not exist before. However, critics say that many countries are becoming increasingly dependent on China due to new debts. About 150 countries are currently participating, including Russia and Serbia. Hungary is now part of the EU.

Meloni has never made a secret of the fact that she didn’t like the idea. The leader of the far-right party Fratelli d’Italia (Brothers of Italy) declares that the country’s sovereignty is sacred. In recent months, there has been increasing speculation that the exit is imminent. The US is also exerting pressure. The background is that the collaboration would have been automatically strengthened in March if the project had not been canceled at the end of this year.

However, Italy’s aim is obviously not to upset Beijing too much. There are concerns from companies that products made in Italy will no longer sell as well in the People’s Republic. The Italians also fear lucrative contracts that would put them in competition with EU partners such as Germany and France. That is why Meloni assured the Chinese at the same time as the farewell letter that they absolutely wanted to stick to the ‘strategic partnership’.

For China, which is increasingly competing with the US, the departure certainly means a loss of prestige. There was initially no comment from the Foreign Ministry following a request from the German Press Agency. When the first speculations arose some time ago, it was pointed out that cooperation had greatly expanded since the signing of the agreement. Trade has increased by 42 percent in five years.

In Brussels, however, the news from Rome created a good mood. In the EU and NATO, Italy’s participation has recently been increasingly seen as a strategic mistake as well as a security risk. The overall goal there is to reduce economic dependence. At NATO, there is a particular danger that Beijing will try to “bring key areas of the technology and industrial sectors, critical infrastructure, and strategic materials and supply chains under its control.”

There probably won’t be much positive news for China at the EU-China summit in Beijing next Thursday. Commission President Ursula von der Leyen and Council President Charles Michel want to make clear that the EU could impose trade restrictions such as special tariffs if China continues to pursue unfair subsidy practices and close its own market to European companies. (sda/dpa)