The country made an “improvised and atrocious” decision when it joined China’s Belt and Road initiative four years ago as it did little to boost exports, Italian Defence Minister Guido Crosetto said in an interview published on Sunday. Italy signed up for the global infrastructure scheme under a previous government, becoming the only major Western country to have taken such a step. It is now considering breaking free of the agreement without irking Beijing.
But that may be easier said than done. The government, led by the League’s Giorgia Meloni, has signaled a desire to scale back Italy’s role in the initiative. A non-binding memorandum of understanding with China, a key plank in its economic policy, expires next year and will require renewed approval. The issue could be a flashpoint in Italy’s forthcoming G7 summit, and it is also likely to come up in closed-door talks at the G20 later this month.
Crosetto, who is part of an administration that is considering how to distance itself from the BRI without upsetting China, was quoted by Corriere della Sera as saying: “Joining the New Silk Road was a foolish and atrocious decision as it only favors Chinese exports and does not do anything for our own.”
He added, “It is clear that this ill-considered choice has created damage.” The scheme, which envisions rebuilding the old Silk Road trade route, is seen as a way of growing China’s global economic influence while expanding its geopolitical clout. It involves billions of dollars in funding for major infrastructure projects worldwide to boost global trade and float Chinese goods to markets further afield.
Lucrezia Poggetti, a senior fellow at the Mercator Institute for China Studies, a German think-tank, suggests that by signing up to the BRI, Italy is taking a significant political risk for little economic gain. She says it is unlikely that the memorandum will guarantee Italian firms access to BRI projects or specific investments and that Italy’s leading exporters to China – Germany and France – have yet to sign such an accord. It will give credibility to President Xi Jinping when his signature policy is criticized for creating debt traps in some countries where it has invested.
Even so, she says it would be difficult for Meloni to abandon the memorandum completely because the 5 Star Movement she leads is committed to strengthening cooperation with Beijing in areas such as green technology and the digital economy. She would have to decide whether to revise the memorandum or opt-out but revive an existing framework known as the Italy-China governmental committee. In both cases, she would have to ensure that the framework does not lead to the renegotiation of specific projects. She says that that would be a risky move that could backfire against her. Meloni is due to visit China this summer, and she may need to deliver a substantial package of commitments from the country for the visit to be worth it.
