|Historic Memorandum Has Huge Ramifications
Along with the memorandum, China and Italy inked development deals covering everything from port management, science and technology, e-commerce and even soccer. These so-called deals reported as totaling as much as $20 billion appear to be Italy's motivation. For Italy, this appears an "any port in a storm" situation. Italy struggling with a high level of debt and a stagnating economy has found the EU less than supportive and lacking answers as to how they might kick-start growth. Still, the folly of linking up with China in hopes they will become a lifeline to prosperity comes across as an act of desperation that will not end well.
|China Has Printed Money Like Crazy (click to enlarge)
Much of the blame for this problematic alliance falls on Brussels and the EU for its failures to deal with worsening conditions within its borders. The U.S. National Security Council was not alone in issuing a direct warning to Italy recently for its coziness with China but was joined by a firestorm of responses from leaders such as Donald Trump, Angela Merkel. Jean-Claude Juncker, the head of the European Commission recently described China as a "competitor, a partner, a rival," terms that indicates the unease and fear at which the EU must feel when they look out at the expanding giant that cranks out products at a cost far below those at which they can compete. Yes, again trade and deficits loom large in the minds of those watching this unfold.
|Port In Trieste Gives China New Access
Following the signing Chinese media celebrated Italy's decision, and predicted that it wouldn't be the last western power to side with Beijing. All this flies in the face of what the European Union proposed following its review of China policy, it recommended "10 actions" to member states, including requiring reciprocity for market access, it also highlighted national security risks stemming from Chinese investment in "critical assets, technologies, and infrastructure." All in all, this is a big deal, it lends legitimacy to China’s predatory approach to investment that continues to unfold across the world and it even undermines the current trade talks between America and China.
Consider this article an overview of the folly of all this and recognition that the world is not progressing in an orderly fashion. Still, the ramifications flowing from Italy's deal with China may, in the end, prove to be a deal with the devil that opens the floodgates that washes away much of the EU and breaks the euro. Because of China's ties with Russia, it might even strengthen Putin's ability to push back on NATO. This may also change the face of Italy forever, adding to the influx of immigrants that are now there we will most likely see an influx of Chinese workers. While many of us can sympathize with Italy for the pickle it finds itself in that lead to this turn of events
This blog is not written for money
or profit but as a way to share ideas
and thoughts. If you liked this post
feel free to E-mail it to a friend
using this link. E-mail to a friend
Footnote; For more about how Italy got into it current mess see the article linked below.