Europe failing to communicate its response to coronavirus crisis, France says

PARIS (Reuters) – Europe has failed to win the communications battle in its response to the coronavirus outbreak, leaving other powers such as China or Russia to win hearts and minds in the most affected countries like Italy, a French official said on Wednesday.

Italy, now the country worst-hit by the virus worldwide, was sharply critical of France and Germany after they initially declined to provide face masks and other equipment to help handle the outbreak.

Rome turned instead for help to China, which sent an airplane full of masks and ventilators bearing “Forza Italia” stickers with small Chinese and Italian flags – and leaving a powerful impression on Italians.

France and Germany later lifted their restrictions and sent hundreds of thousands of masks to Italy, but failed to garner enough media coverage to correct the first impression of a lack of European solidarity, the French official said.

“On the issue of solidarity, we had a narrative weakness,” an Elysee adviser told reporters. “Europe hasn’t, as a group, communicated enough on the concrete efforts it was making at the local or regional level towards one another.”

“Germany has sent masks to Italy, France has sent masks to Italy, as many as China has so far,” the official said, saying Paris had sent 1 million masks and 200,000 gowns to its neighbor despite a critical shortage for its own population.

German hospitals with spare capacity welcomed their first coronavirus patients from Italy on Tuesday.

“A lot has been done, so we need to get out of this Europe-bashing, because that’s not right,” the adviser to President Emmanuel Macron, a fervent European integrationist, said.

“Mistakes were made for sure, there was some flip-flopping, hesitations, but that’s the case everywhere in the world,” the official said. “When we see what’s going on in the United States today, Europe is not the continent that’s the least organised.”

But damage seems to have been done.

A recent poll by Monitor Italia showed 88% of Italians, once one of the most Europhile people in Europe, believed the European Union had not done enough to help their country.

The same poll showed those who believe EU membership is a disadvantage to Italy has risen to 67% from 47% in November.

China was not alone is outdoing European countries and Brussels on the communications front.

The Russian army has also flown medical help to Italy after receiving an order from President Vladimir Putin. The planes and trucks it sent bore giant stickers showing heart-shaped Russian and Italian flags next to one another with the slogan “From Russia with Love” in both Russian and Italian.

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From hero to zero: coronavirus upends livelihoods across Europe

DUBLIN/MADRID (Reuters) – On Sunday morning, Irish chef Cúán Greene woke up to the review of his life. Britain’s Observer newspaper told readers his cooking would make them “thrillingly giddy and euphoric”. Hours later he was out of a job.

Bastible, the Dublin restaurant where he was head chef, was closing as a result of the growing threat from the coronavirus. Greene, 27, and 13 colleagues were all let go.

“When you get a great review, it’s a special week every time, and those weeks turn into great months. That’s what’s upsetting because with what’s going on, you feel slightly stunted,” said Greene, who worked in the world famous Danish restaurant Noma before returning home to Dublin.

“That’s very hard to take, I have to admit and that’s what makes me turn at night.”

Greene’s woes are an example of how the coronavirus pandemic is laying waste to hospitality businesses across the board, irrespective of size or success. Employers across Europe are slashing jobs at a ferocious pace as emergency lockdowns shutter bars, restaurants and hotels, empty offices and ground airlines.

It will be months before official national data reveals the scale of the destruction but the International Labour Organization warned on Wednesday that up to 25 million jobs could be lost globally if governments don’t act fast, outpacing the 22 million jobs lost during the 2008-09 financial crisis.

European countries have pledged hundreds of billions of euros to mitigate the economic impact of the virus and have eased the rules to make it easier for people to qualify for unemployment benefit and to help companies keep workers on.

In Italy, the epicenter of the outbreak in Europe, the state has gone one step further, suspending any firing procedures begun after February 23.

But even with the promises of cash, the scale of the crisis has authorities scrambling to deal with the demand for help.

‘SAVINGS WON’T LAST’

In Ireland, where Prime Minister Leo Varadkar estimated 100,000 people or more – almost 5% of the workforce – could lose their jobs within two weeks, about 20,000 people presented at unemployment offices to apply for benefits on Friday.

In Germany, where joblessness had reached historic lows, companies have flooded local authorities with requests for state aid to finance short-time work.

“It’s going through the roof,” a spokeswoman for the Federal Labour Office said, adding that there was also interest from sectors that normally don’t apply for such measures.

In Belgium, about 30,000 firms have applied for temporary unemployment benefits for nearly 300,000 workers, a government spokesman said. If granted, the measure allows workers to be paid 70% of their salary by the state.

The abruptness of the layoffs across Europe, coupled with the growing proportion of contract workers who may not qualify so easily for unemployment benefit, mean not everyone will be protected.

Over 100,000 workers across Spain have been let go due to the coronavirus, and the total number could reach 1 million, the head of one of Spain’s largest unions has said.

In central Barcelona, Alejandra Paola Carrera, 27, is worried she won’t qualify for state support because she only started contributing to the social security system last July.

“My savings won’t last me more than a month,” said the office administrator who lost her job on Monday. “I rent a flat with three others and we’re all in the same situation: temporary workers, and just fired.”

SHOCK FOR YOUNG PEOPLE

Single mother Viviana, also in Barcelona, faces a challenge to support herself and her three-year-old daughter after losing her job working in recruitment for a real estate agency.

“With what I earned from my last days of employment I won’t be able to pay my rent, water, or any other bills,” said the 31-year-old, who asked that her surname be withheld.

“I don’t really know what I’ll do,” she added. “I’ll take whatever I can find, because I’m a single mother and my daughter depends on me.”

In Poland, which had been enjoying record low unemployment, the job losses are particularly difficult for younger workers used to having options.

Nicoise Kemp, 23, a student in Warsaw, lost her job at one of the city’s top hotels after four years working there as a waitress and bartender.

“Right now there isn’t even any recruitment going on,” she said. “I think for students this was quite a shock, because one moment we had a job, we had university classes we were very busy, and then one day we don’t have anything.”

With no mortgage or children, Greene, the Irish chef, said he was lucky he could survive on unemployment benefit for now and dip into savings if he had to.

He plans to spend time with his family and learn the “millions of things” that working in a busy kitchen does not allow, like honing his fermentation skills.

“I’m staying very positive,” he said. “I’ve bread on the go right now and I’ve a plot in the garden where I’m going to start planting vegetables. I’m okay for now.”  

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As COVID-19 crackdowns grow in Europe, rights groups urge caution

Action to stop coronavirus which limits civil liberties is acceptable but only in short term, human rights experts warn.

London, United Kingdom – As COVID-19 spreads, an increasing number of countries are declaring unprecedented border closures and restrictions on their citizens’ free movement, with European governments introducing measures unheard of in peacetime.

Nearly 200,000 people have contracted the infection worldwide. Of these, more than 7,000 have died, as nearly 80,000 recovered.

More: 

  • France to deploy 100,000 police to enforce coronavirus lockdown

  • Spain declares state of emergency over coronavirus

  • UK to introduce emergency laws to curb coronavirus outbreak

On Tuesday, European Union leaders agreed to close the bloc’s borders for 30 days. It would be down to European countries to implement the closure of their borders to citizens from third countries, said European Commission President Ursula von der Leyen.

All 445 million citizens and residents of the EU now live under some degree of movement restrictions.

On Tuesday, France became the latest European country after Italy and Spain to start a 15-day lockdown, deploying 100,000 police officers and setting up checkpoints across the country.

If they carry the proper paperwork, citizens are allowed to buy groceries and other necessities, and for health or work reasons, where this cannot be carried out from home.

But those found to be breaking the rules risk a 135-euro ($150) fine. France has reported more than 6,000 coronavirus cases and almost 150 deaths.

Fionnuala Ni Aolain, UN special rapporteur on the promotion and protection of human rights and fundamental freedoms while countering terrorism

Italy, now the most affected country after China with more than 2,000 deaths concentrated in the northern regions, last week imposed a total lockdown, closing all bars and shops, with the exception of grocery stores and pharmacies.

Schools, offices and all non-essential services have been shut down. If stopped by police, residents must provide a self-declaration form justifying a reason for being out and confirming they do not have the virus.

If found to be lying, they could face a 206-euro ($226) fine and up to three months in prison.

UN human rights experts called on states to tread carefully, warning against misusing emergency powers invoked.

“The danger is that states, particularly non-democratic or less open societies, would use the opportunity given by the health emergency to crack down on particular minority groups, or individuals or groups that they see as highly problematic,” Fionnuala Ni Aolain, the UN special rapporteur on the promotion and protection of human rights and fundamental freedoms while countering terrorism, told Al Jazeera.

“We need to ensure that when the emergency ends, states return to normal and do not continue to use these powers in ways they were not intended to do,” she said, adding that emergency powers introduced after 9/11 and still in place after 20 years constitute an undesirable precedent. 

“States might find, as we often see in the counterterrorism space, that extensive powers are very comfortable, and they give them a lot more leeway than they usually have. The key point is that leeway shouldn’t be used indefinitely.”

Spain declared a state of emergency on Saturday and imposed a nationwide lockdown for over two weeks to stop the virus spreading from its local epicentre in Madrid.

Spanish officials have already said that they expect to renew the measures. Nearly 500 people have died after contracting the virus in Spain, the second worst-affected European country.

The Spanish government deployed more than 1,000 army personnel in 14 cities to help police enforce the lockdown. According to Reuters, 199 people were fined and one person was arrested as of Monday for breaking the rules.

“The general rule is that restrictions on rights, like we’re seeing right now, are legitimate and permissible, if they’re lawful, to meet a legitimate objective, and if they are imposed for the shortest amount of time and proportionate to the objective,” Judith Sunderland, associate director at Human Rights Watch’s Europe and Central Asia division, told Al Jazeera. 

“The big question is how governments mitigate the worst impact of these measures, particularly on the most vulnerable in our society.”

UK-based rights group Liberty called for more transparency from the UK government, which critics have said is not acting drastically enough to contain the virus.

In recent days, however, the UK has stepped up its rhetoric and strongly urged more stringent social distancing measures and closures. 

According to the Health Protection Coronavirus Regulations published by the government last month, failure to comply with self-isolation rules can be punished with a fine of up to 1,000 pounds ($1,200), and anyone who is suspected to be ill and found outside can be temporarily detained.

“We need the government to offer solutions that build resilience, support vulnerable people and protect communities – criminalisation and over-policing must not be the go-to answer,” said Liberty’s director, Martha Spurrier.

“Any new guidance and legislation issued in the coming weeks and months must be proportionate and time-limited and must have fair and equal access to care at its heart.”

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Greece's first female president sworn in

Ekaterini Sakellaropoulou, a former high court judge, was overwhelmingly approved by Greece’s parliament.

Greece’s first female president, a former high court judge, was formally sworn in to office on Friday, nearly two months after the country’s parliament voted overwhelmingly to elect her.

The swearing-in ceremony for Ekaterini Sakellaropoulou, 63, took place in an almost empty parliament, as part of measures to prevent the spread of the new coronavirus. Only a handful of officials and a limited number of journalists were present.

More:

  • Ekaterini Sakellaropoulou elected Greece’s first female president

  • Greece condemned over ill-treatment of refugees held on ship

  • Turkey’s Erdogan accuses Greece of ‘Nazi tortures’ on refugees

Greece has shut down schools, universities, cinemas, theatres, gyms and nightclubs, and authorities have warned people to stay home and avoid large gatherings in an effort to contain the outbreak. The country so far has reported 117 confirmed cases and one death. The ceremony was being covered live on state television.

After the swearing-in, Sakellaropoulou lay a wreath at the Tomb of the Unknown Soldier in the square outside parliament, before a presidential honour guard. Despite the warnings about the virus, a small crowd gathered to watch, standing behind a security cordon across the street.

The new president headed the Council of State, the country’s highest administrative court, since 2018. She takes over the five-year presidency from veteran conservative politician Prokopis Pavlopoulos.

In a brief speech at the presidential palace, Sakellaropoulou spoke of the battle against the coronavirus and the recent migration crisis as the country’s two main challenges.

Greece must continue to adhere to its democratic principles and the state of law, moving towards “a future of prosperity that will have room for us all”, she said.

In a clear reference to neighbouring Turkey, Sakellaropoulou said Greece was being called on to “thwart the aggression of those who, using human pain, want to harm our national sovereignty”.

Turkey recently declared its borders to Europe were open, and encouraged thousands of refugees and other migrants to try to push into Greece. Clashes with Greek border guards have frequently broken out, and Greece has come under criticism for occasionally using heavy-handed tactics in response.

Greece, Sakellaropoulou said, must “secure the integrity of our borders while also defending and fulfilling our humanitarian duty toward defenceless and desperate people; a difficult but not impossible equation”.

She also called on all Greeks to strictly adhere to all guidance given by health authorities to prevent the spread of the coronavirus.

Prime Minister Kyriakos Mitsotakis nominated Sakellaropoulou as a non-partisan candidate who would enjoy broad support from across the political spectrum. All big parties voted in favour, with Sakellaropoulou being elected to the largely ceremonial post in a 261-33 vote in January, well above the 200 votes required. Six legislators were absent.

Greece has a low number of women in senior positions in politics, and Mitsotakis had been criticised for selecting a nearly all-male cabinet after he won general elections in July 2019. In the current Greek Cabinet, all but one of the 18 senior positions are held by men.

“I hope that the election of a woman for the first time to the highest position of the country will improve the position of all women in the country, both in the family and in society,” Sakellaropoulou said.

“It is time for the women of this country to realise that they can attain their dreams, on their own merits, without facing obstacles simply because they were born women.”

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Airbus: End of Washington state tax break of Boeing just 'initial step'

WASHINGTON (Reuters) – Europe’s Airbus (AIR.PA) on Thursday welcomed a move by Washington state to remove what it called “illegal subsidies” to Boeing (BA.N), but said the U.S. planemaker had received billions of dollars in other subsidies and tax breaks.

The Washington state Senate voted on Thursday to remove an aerospace tax break for Boeing that had been contested by the European Union, sending the measure to Washington state Governor Jay Inslee for a potential signature.

Boeing said the move would bring the United States into compliance with World Trade Organization rules, but Airbus said it marked only “initial steps” and it remained to be seen how other aid provided to Boeing by the state of Kansas and some U.S. federal agencies would be addressed

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'It's ridiculous': Trump travel ban sows panic in European airports

MADRID/PARIS (Reuters) – Weary and confused travelers, many wearing face masks, rushed to board flights from European airports to the United States on Thursday after U.S. President Donald Trump announced sweeping travel restrictions to curb the spread of coronavirus.

His 30-day travel order applies to citizens of 26 European countries but excludes Britain and Ireland as well as American citizens. It takes effect from midnight on Friday.

“It caused a mass panic,” said 20-year-old Anna Grace, a U.S. student on her first trip to Europe who changed her booking to fly home from Madrid’s Barajas airport instead of going on to France. Her friends were less successful in rebooking flights.

Though American citizens are exempt from the travel ban, Grace and many others said they preferred to return home in case the restrictions are expanded or for fear of contracting coronavirus while in Europe.

“We are nervous that we won’t be able to get back into the country,” said Atlantia resident Jay Harrison, 29, hoping to board a flight in Brussels. “If it’s going to be another 30 days and we’re stranded, it’s going to be very difficult, very expensive and just tough to get back in and tough to live with.”

Related Coverage

  • Rome airports announce shutdowns as Italy becomes coronavirus pariah
  • EU disapproves of US travel ban, taken unilaterally and without consultation

Paola Mesa, 29, a Spanish woman flying from Barcelona to San Francisco, said she backed Trump’s ban on travel from Europe.

“It’s what Spain should have done before,” she said. The death toll from coronavirus in Spain nearly doubled to 84 on Thursday and the number of cases rose to nearly 3,000.

Trump says he had to act as the European Union had failed to take adequate measures to stop the coronavirus. The EU dismissed his comments and criticized the lack of consultation from the U.S. side.

“A BIG MESS”

Many travelers, however, were critical of Trump’s decision.

“It’s ridiculous. Why do we impose a ban now when the virus is already in the United States?” said Leo Mota, 24, who had just arrived at Paris’s main international airport, Roissy Charles de Gaulle, from Los Angeles.

Miguel Paracuellos, a Spaniard who works in the United States, said Trump was trying to compensate for his failure to expand testing and screening programs at home. “He is blaming an external enemy, in this case Europe,” he said.

Jon Lindfors, an American traveler in Paris, was equally scathing about Trump, who will seek re-election in November.

“Trump said it’s not a health crisis but it is, that it’s not an economic crisis but it is. We don’t believe what Trump says anymore,” Lindfors said.

A Delta crew member, who asked not to be named, said Trump’s travel ban had caught the airline off-guard.

“It’s going to be a big mess… We were not expecting something like that. We don’t have all the details to know what it means for us and for the company,” the crew member said.

At Rome’s Fiumicino airport, largely empty due to draconian measures taken by Italy to combat coronavirus, one Italian traveler just back from New York said the United States would soon face the disruption Europe is now experiencing.

“(In New York)… there were only a few flights canceled or delayed… They don’t understand the situation yet,” said Giuseppe Riccio, who wore a face mask. “There are no controls in place, shops are full of people.”

Gregory and Ada Goldberg, an American couple from San Francisco, were trying to bring forward their flight home from Barcelona but were not getting much help at the airport.

“This was meant to be two weeks of pleasant vacation but it has become a nightmare,” said 69-year-old Ada.

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Seeking to avoid EU tariffs, Washington state House passes bill to drop Boeing tax break

SEATTLE (Reuters) – Washington state’s House of Representatives passed a measure on Wednesday night that removes a key tax break for Boeing Co (BA.N) and other aerospace firms, in a bid to head off possible European tariffs on U.S. goods and ease a transatlantic trade dispute over aircraft subsidies.

“This measure is important to protect our state’s economy,” House Democratic Majority Leader Pat Sullivan said by phone. “We don’t want tariffs levied by the European Union on the aerospace industry but also on other key industries in the state like wine and agricultural products.”

The measure passed 73-24 after winning approval on Tuesday in the Senate, a spokeswoman for House Democrats said.

However, late changes to the legislation means it must be put to another vote in the Senate before it can go to Washington state Governor Jay Inslee’s desk for signing.

The World Trade Organization has found that Boeing and Europe’s Airbus (AIR.PA), the world’s two largest planemakers, received billions of dollars of unfair subsidies in cases dating back to 2004. The global trade body has faulted both sides for failing to comply fully with previous rulings, opening the door to a tariff war.

After years of debate, the focus of the European case against the United States involves a preferential state tax rate for aerospace introduced 16 years ago and renewed in 2013 to help attract production work for Boeing’s 777X.

The planned law changes would remove the 40% saving on Business and Occupation tax, which saved Boeing some $118 million in 2018 based on published jetliner revenues.

“We applaud the House for its commitment to full WTO compliance,” a Boeing spokesman said by email on Wednesday evening. “We support this legislation and look forward to the Senate concurrence vote.”

The United States in February toughened its own tariffs on aircraft built by Boeing’s arch-rival Airbus after winning approval last year from the WTO to penalize European goods over Airbus subsidies.

The European Union is widely expected to win approval to use a similar trade weapon to penalize imports of U.S. goods when a parallel case over U.S. support for Boeing comes to a head during the spring.

Makers of products ranging from luxury goods to whisky have raised concerns over the impact of a tit-for-tat tariff war spreading beyond the aerospace industry.

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MORNING BID-Rate cuts no panacea for virus damage

(A look at the day ahead from EMEA deputy markets editor Sujata Rao. The views expressed are her own.)

March 4 (Reuters) – Hopes that an emergency Fed rate cut would jumpstart battered stock markets were quickly dashed, with Wall Street and Europe closing weaker and gold soaring – who remembers when a 50 basis point cut last had this kind of impact? In short, the move has backfired – possibly by spooking markets who may be assuming the Fed knew something nasty they weren’t telling, hence the decision to strike preemptively.

The other issue is the futility of it all – as one analyst puts it, lower interest rates can’t help you if you are in bed with coronavirus. Or for that matter, if you have to shut your factory because workers have the virus. One thing, the Fed move did was to cut the dollar’s yield premium against other developed markets – U.S. 10-year yields sank below 1% for the first time, taking the premium over German Bunds to the lowest since 2017, down 30 bps this year. It’s also weighing on the dollar, something the U.S. administration might not be too upset about.

That may not last – the ECB may cut rates next week and the export-reliant euro zone is more exposed to virus economic damage. Euro-dollar scaled $1.12 yesterday, though its now off that as the dollar index rises off 5-month lows. The yen is down 0.4% and the Canadian dollar is awaiting the Bank of Canada meeting that should lower rates to 1.5%.

Meanwhile, Korea shows how it’s done — the government announced a $9.8 billion stimulus package, boosting stocks more than 2% and the won to two-week highs

Still, this morning European shares are a bit firmer and MSCI’s global index is flat after losing 1% yesterday. Chinese stocks are up 0.6%. U.S. equity futures are up a whopping 1.4% — the catalyst might be Joe Biden strengthening his position in the Democratic primaries after Super Tuesday over leftist Bernie Sanders.

The yuan at six-week highs has regained the losses made since opening from New Year holidays, possibly as the number of new infections in China falls. And the central bank kept short-term interest rates steady, despite the Fed and even as Caixin PMIs showed the services sector had its worst month ever in Feb, almost halving from January levels. But expect more cuts; with the Fed in a full-blown easing mode, there is no way China can hold off.

In fact all dataflow reinforces the gloom — a Chinese survey showed expectations for the one-year business outlook the gloomiest since 2005. Will U.S. non-manufacturing ISM survey confirms whether services are indeed in contraction, (as PMIs signalled earlier)? There will also be jobs figures from ADP, the company handling one-fifth of U.S. private payrolls. And Europe releases Feb retail sales and final service-sector PMIs – normally final readings are a non-event but now they could they could be important because of how fast sentiment is changing.

Bond markets have steadied, though the U.S. 10-year yield remains below 1% and it may be a matter of time before German 10-year Bund tests the minus 0.74% record low.

On the equities front, European Q4 earnings are mostly behind us but among trading updates published today is Dialog Semi which expects its chip supply chain to return to normal in Q2 2020.

In the M&A beat: Investment group Exor announced it entered an MoU to sell its 100% stake in reinsurer PartnerRe to France’s Covea for $9 billion in cash.

Companies news include a possible boost for Roche as China will use an arthritis drug to treat some coronavirus patients in severe condition and it wins a fast-track review status in the US for a new diagnostic approach for liver cancer.

But possibly grim for Intu which failed to raise capital and for German chemicals group Evonik Industries which sees chemicals sales slowing. Same for Engineering group Andritz which expects a slight increase in sales and a flat EBITA this year. Wizz Air shares has lost ground after cutting flights and further reducing capacity.

Legal and General posted a 12% rise in 2019 operating profit but shares are tanking.

Struggling Pandora will cut 180 staff and eliminate an organizational layer in an effort to move closer to consumers.

In emerging markets, South Korean shares gained 2.2% while broader emerging shares rose 0.5%, their third consecutive day of gains and the emerging currency index is up 0.3%

Lebanon’s government is weighing options for the $1.2 billion Eurobond maturing in March. (Editing by Toby Chopra)

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Death penalty examined at Belgium forum

At the World Congress against the Death Penalty in Brussels, the use of capital punishment is considered a political and human rights issue.

    Education campaigns, art exhibits and petition signing have all been part of the World Congress against the Death Penalty in Brussels.

    More than 20,000 prisoners are on “death row”, but 114 countries have abolished capital punishment and 32 others have introduced a moratorium.

    Just this week, Egypt’s President Abdel Fattah el-Sisi defended his country’s use of execution by saying that his country had a “different culture”, but abolitionist campaigners see it as a political and human rights debate, and one that is slowly shifting.

    Al Jazeera’s Paul Brennan reports from Brussels.

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    Italy joins China's Belt and Road Initiative

    Italy is the first G7 country to sign up to the scheme, in a move that has caused upset in Washington and Brussels.

      Resisting pressure from Washington and Brussels, Italy on Saturday became the first G7 country to join China’s controversial Belt and Road Initiative (BRI).

      Italy’s Prime Minister Giuseppe Conte signed a memorandum of understanding (MoU) with Chinese President Xi Jinping in Rome, endorsing the global infrastructure-building scheme.

      Conte and Xi shook hands after 29 separate sections of the MoU were signed by members of both governments.

      As with previous MoUs, Saturday’s accords were wide-ranging, covering cooperation in the banking sector, a partnership between a Chinese construction company and Italian ports and the export of fruit from the Mediterranean country to China. 

      The agreements also hinted at collaboration between media outlets, as well as in the spheres of science and technology, and promised the return of hundreds of Chinese cultural objects currently in Italy. 

      The MoU is non-binding. But by opening the door to greater Sino-Italian cooperation, it threatens to deepen rifts between Rome and its traditional allies and within Italy’s fragmented coalition government. 

      Luigi di Maio, Italy’s minister for economic development and one of the country’s two deputy prime ministers, told reporters after the signing that Rome’s goal was to “rebalance an imbalance” in Sino-Italian trade. 

      “There is a lot of ‘Made in China’ coming into Italy and too little ‘Made in Italy’ that goes into China,” Di Maio said, adding that Italy now hopes for “a substantial and gradual increase of exports” to “balance out the trade imbalances”. 

      New Silk Road vs debt-trap diplomacy

      Announced in 2013 as an ambitious plan to build a “belt” of overland corridors and a “road” of maritime shipping lanes spanning Asia, the Middle East, Africa and Europe, the BRI has evolved to encompass other regions as well as digital infrastructure and even cultural exchanges.

      Also known as “The New Silk Road”, it promises to strengthen China’s trade and investment links with the rest of the world and cement its position as a major global economic power.

      BRI projects are financed by Chinese state-owned enterprises that offer participating countries inexpensive loans and credit. Analysts at Morgan Stanley predict China’s investments in BRI countries could reach $1.3 trillion by 2027.

      The scheme has drawn fire from critics who accuse Beijing of engaging in so-called “debt-trap diplomacy” and potentially masking military endeavours as commercial enterprises.

      In 2017, Sri Lanka handed Beijing control of a strategic port after it couldn’t pay off its Chinese creditors.

      The spectre of unsustainable debt burdens has since prompted some countries to delay, scale back and cancel BRI projects.

      Bold statement to Brussels

      Italy’s decision to defy the recent backlash and join the BRI comes at a time when the potential to boost Italian exports to China and pump money into crumbling Italian infrastructure is an especially alluring proposition.

      Italy has an onerous public debt and it fell into recession at the end of last year. 

      “Italy needs investment and resources and China has those to provide,” said Erik Jones, professor of European studies and international political economy at Johns Hopkins University’s Bologna-based School of Advanced International Studies.

      “Italy also needs to underpin and strengthen its business ties with China [and] this agreement will help there,” he said. 

      Italy is the thirteenth European Union country to sign a memorandum of understanding with China. But it is the first G7 member to do so, throwing the cohesion of the G7 into question.

      The landmark move is also a bold statement to Brussels, which engaged in an acrimonious budget battle with Rome last year that forced Italy to pare back its spending plans.

      Brussels and Rome have also butted heads over immigration.

      “Italy has issues where it is not happy with the EU and the EU is not happy with it, and the only way out of this conundrum is for [Italy] to expand their trade,” Einar Tangen, a political and economic affairs commentator, told Al Jazeera.

      “Being part of the Belt and Road Initiative would give them a little bit more independence and obviously offer more trade,” he said.

      Brussels has held a tougher position against the BRI since reports first surfaced of Italy’s plan to join the scheme.

      The European Commission and the EU’s diplomatic arm released a paper last week that branded China a “systemic rival” and threatened to tighten regulations on Chinese investment in Europe.

      The paper also included a pledge that EU member states would push for a common approach to potential 5G security risks in response to concerns raised by the US over Chinese tech giant Huawei.

      Uneasy alliances

      Some analysts also see Italy’s embrace of the BRI as a symbolic gesture of independence ahead of the European Parliament elections this May. 

      “This agreement is something the government can hold up as an accomplishment,” said Jones. “That is particularly relevant for Prime Minister Giuseppe Conte, who tends to have to mediate between the coalition partners more than he is able to take credit for new initiatives.”

      But joining the BRI could further exacerbate tensions between the two main parties in Italy’s coalition government. 

      Di Maio’s anti-establishment Five Star Movement has championed stronger ties with China, while its main coalition partner, the Eurosceptic, far-right League, is seeking to maintain good relations with the US, which is embroiled in an ongoing trade war with Beijing.

      The US and China are also in an escalating dispute over Huawei, whose products the US claims pose a risk to national security. 

      When reports of Italy’s intentions emerged in early March, the White House National Security Council tweeted: “Endorsing BRI lends legitimacy to China’s predatory approach to investment and will bring no benefits to the Italian people.”

      On Tuesday, Conte appeared to try and assuage Washington, telling Italy’s parliament that any commercial and economic deals with China “do not remotely put into doubt our Euro-Atlantic alliance”.

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