The country is the only G7 nation that signed up to the initiative
© Getty Images / erhui1979
Italy may pull out of Beijing’s ‘Belt and Road’ infrastructure project amid mounting tensions between the world’s two superpowers, the US and China, Bloomberg reported on Saturday, citing sources. Italy is the only Group of Seven (G7) country that has a memorandum of understanding (MOU) on the initiative with Beijing, set to expire next year.
According to the report, Italian Prime Minister Giorgia Meloni wanted to make an announcement on Italy’s participation in the ‘Belt and Road’ by May’s G7 summit, but is still undecided as to whether the MOU should be scrapped or renewed.
Sources claim opinions on the future of the deal are split within Meloni’s administration, with her Brothers of Italy party favouring an exit, while others are urging to stay put. Prior to being elected, pro-US Meloni called the agreement with China a “big mistake,” but lately her rhetoric on the ‘Belt and Road’ has been more cautious.
The MOU was initially signed in 2019 and will be automatically extended in March 2024 unless Meloni decides to opt out. While the deal itself has not led to deeper cooperation between Italy and China, analysts warn that scrapping it would lead to economic and diplomatic repercussions and a souring of Italian-Chinese relations.
The two countries have strong economic ties. Italy is the third largest importer of Chinese goods in the EU, and the fourth largest exporter of goods to Asia’s biggest economy, which has a taste for Italian luxury brands. Trade between the two nations in the past three years “has set new records, touching €73.5 billion ($81.6 billion) in 2022,” Chinese Ambassador to Italy Jia Guide said last month.
The dilemma is exacerbated by the worsening relationship between Washington and Beijing, which is being felt throughout the EU, a staunch US ally which is also strongly dependent on economic relations with Beijing. The US has been introducing export controls on key technologies to prevent them from reaching China, and urging Europe to follow suit, which China has been trying to prevent.
“Italy is stuck between a rock and a hard place, and what to do with the cooperation pact is a real diplomatic conundrum for Meloni. Renewing it would send a very difficult message to Washington, but not renewing it would put a strain in relations with China,” Francesca Ghiretti, an analyst at the Mercator Institute for China Studies, told Bloomberg.
“At the moment, it seems the [Italian] government is leaning toward not renewing the pact, but in this scenario it will be key to coordinate with the US and other allies to react to a possible response,” she added.
For more stories on economy & finance visit RT’s business section
