China Traces A New Line Through Europe

Chinese President Xi Jinping will arrive in Rome tomorrow ready to plant a flag in the heart of Europe. Italy is expected to break with most other advanced economies by formally signing onto Beijing's $1.3 trillion global Belt and Road (BRI) infrastructure initiative.


Announced in 2013, BRI aims to boost China's trade and international clout through massive new investments in roads, railways, and ports across the world. Italy's decision to sign on to the initiative – the centerpiece of Beijing's plans to overtake the US as the dominant global economic power of the 21st century – is controversial.

Brussels and Washington don't like it at all, because they fear that if Italy takes loans from China it could end up in a dangerous web of debt that exposes it to pressure from Beijing. After all, Italy is already Europe's second most indebted country, and unlike much smaller economies like Greece, a systemic crisis there could unravel the entire Eurozone.

Within Rome too there is some disagreement: Deputy Prime Minister Luigi Di Maio, of the centrist 5Star Movement, is all for closer relations with Beijing, but the far-right Interior Minister Matteo Salvini is more skeptical.

Still, Chinese cash solves a pressing problem for their populist governing coalition. Clashes with Brussels over budget parameters have forced Messrs. Di Maio and Salvini to backtrack on their campaign promises to cut taxes and boost social spending. Delivering new infrastructure with Chinese money could be a big political winner, especially after a high-profile bridge collapse last year.

More broadly, Europe is already having trouble finding consensus on how to approach China's tech investments, 5G equipment suppliers, and infrastructure investments. The smaller economies of Central and Eastern Europe welcome the cash, while most of the larger economies are concerned about the financial and security implications of Chinese capital. EU members are scheduled to meet on Friday to discuss a common approach to Chinese investment into the bloc. To which we say, in bocca al lupo!

The bottom line: The decision of the bloc's fourth largest economy to embrace Beijing has just opened up a major new fault line within Europe.

Earlier this year, two powerful cyclones struck the northern coast of Mozambique and were followed by months of torrential rain. Mozambique faced an unprecedented humanitarian crisis. "The coast road from Pemba airport to the city center and its harbor was totally destroyed," said Franco Picciani, operations manager at Eni Rovuma Basin. The damage brought the city's economy to a standstill.

Eni answered the call, providing its equipment and expertise. "We rebuilt the coast road in less than two months," Picciani said. "We work in the area. We have a logistics base here. It's home to us. When the area needed help, we didn't stop to think about it for a minute. It goes without saying that we should look after the community we work in."

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Latin America's longest-serving head of state is now out. Bolivia's fiery leftwing President Evo Morales resigned on Sunday, after weeks of increasingly violent protests over his apparent bid to rig last month's presidential elections.

Although he agreed under international pressure to hold a fresh ballot, he and his vice president were ousted by the military after a number of local police units sided with demonstrators.

His supporters say this is an illegal coup that undermines democracy. His opponents say Morales' attempt to rig the election was the real assault on democracy and that the army has merely stepped in to restore order so that elections can be held.

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