Commentary on Political Economy

Wednesday, 19 May 2021


This Is How Europe Can Push Back Against China and Russia

A huge infrastructure project by 12 eastern EU states is an obvious geopolitical opportunity.

U.S. LNG showing up in a Polish terminal, with no Russian pipeline in sight.
U.S. LNG showing up in a Polish terminal, with no Russian pipeline in sight. Photographer: Bloomberg

The most important geopolitical project you’ve never heard of is called the Three Seas Initiative. It’s a joint endeavor by 12 eastern members of the European Union to update the physical and digital links between the Baltic, Adriatic and Black Seas. That makes good sense in its own right. But the kicker is that this undertaking may be Europe’s best answer to the encroachments of Russia and China.

The initiative was dreamed up by Croatia and Poland in 2015. It then encompassed all the other EU member states that used to be behind the Iron Curtain, plus Austria. Though economically vibrant, most of this region still lags the rest of the bloc in infrastructure. Travel by road and rail takes two to four times longer on average than in the rest of the EU.

Linking the Twelve Between the Three Seas

An infrastructure initiative aims to contain Russia and China

What’s missing in particular is good highways, railway tracks and gas pipes running north and south. This is a legacy of the Cold War. The Soviet hegemons made sure that Russian gas, tanks and troops could easily move east-west, but cared not a hoot about other connections among the countries they occupied.

The Three Seas Initiative wants to change that. Projects include, for example, a port in Croatia that could welcome ships carrying liquefied natural gas — from the U.S., for example — and the pipelines that would bring this gas north to partner countries. Poland already has an LNG terminal.

One obvious bogeyman in the background is Russia. It’s long used its role as an energy supplier to assert power over the countries through which it pipes its gas. Ominously, it’s now flanking the whole region with new links — through the Black Sea to the south and the Baltic Sea in the north. The latter, called Nord Stream 2, runs directly from Russia to Germany and has awakened old fears among the Poles and Balts that they might be circumvented, blackmailed or cut off.

The initiative’s other projects include roads, railways, river ports, bridges and more. And of course lightning-fast fiber-optic cables, as well as all the bits and bobs needed to launch fifth-generation (5G) telecom networks.

Here the bogey is China. As part of its quest for superpower status, Beijing has for years been pushing vast infrastructure projects to gain influence in eastern Europe. The flagship effort is the Belt and Road Initiative, which spans ports, railways, roads and digital connectivity across Eurasia and Africa. Another push is called 17+1, where China is the 1 and the 17 others are eastern European countries, including ten of those now also in the Three Seas Initiative.

Many of these Chinese initiatives are barely disguised attempts to project power around the world. Sometimes, China finances a port or bridge with rapacious terms intended to leave the borrower in a debt trap. Other times, the Chinese bluntly offer largesse in return for political support by the recipient country.

An egregious example is Hungary. It partnered with China on a huge project to build a railroad from Budapest to Belgrade and the Greek port of Piraeus, itself majority-owned by a state-controlled Chinese company. Ever since, Hungary keeps raising eyebrows in Brussels by blocking EU declarations against Chinese human-rights abuses. This month, for example, Budapest vetoed an EU statement criticizing Beijing for cracking down on democracy in Hong Kong.

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In part, this reflects the whims of Hungary’s prime minister, Viktor Orban, a populist autocrat who likes to aim his propaganda at the EU and keep his geopolitical options open. But the bloc is also to blame. Even though Brussels does send a lot of money to the region — Poland and Hungary have been the biggest net beneficiaries of the EU budget — it clearly left its flank open when it came to infrastructure investments, a gap into which the Chinese stepped.

The EU was initially suspicious of the Three Seas Initiative. The political rift between its western and eastern members has widened in recent years, as Hungary and Poland have whittled down the rule of law and drifted toward populism. The initiative at first smelled like an eastern attempt to rally the region against Brussels.

It isn’t. Rather, it’s a visionary quest to make the region both prosperous and autonomous from Russian bullying and Chinese meddling. The U.S. understood this earlier than the EU did. Washington especially likes the initiative’s digital aspirations, which it sees as an opportunity to keep the Chinese telecom company Huawei Technologies Co. out of the region’s fledgling 5G networks.

The Three Seas Initiative is a great idea, and one that Washington, Brussels, Berlin and other Western capitals should back. The U.S. and EU have already pledged dollops of money — it should be oodles instead. The same goes for enthusiasm.

But the EU should also be clear about its expectations. First, all involved, including Hungary, must acknowledge the geopolitical subtext and unambiguously declare their allegiance to Brussels, foregoing dalliances with Beijing. Second, the initiative mustn’t become the germ of an eastern bloc that defines itself in opposition to the rest of the EU.

This joint European project should instead mark the beginning of an overdue reconciliation and integration between Europe’s east and west. If the 12 between the three seas endorse that idea, then all 27 can become a new bulwark of the wider West.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

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