Earlier this week, Italy announced that it will be joining Xi Jinping’s Belt & Road Initiative (BRI). Today, Lichtenstein became the second European Union country to join the hugely ambitious project.
I was initially surprised to see a second EU country join so quickly after Italy, especially considering that many online publishings were of the opinion that Italy might be making a mistake. Then I realized it actually is very plausible that more countries will follow suit sooner rather than later. Here’s why:
- EU countries are already on notice that some (if not most) BRI investments in other countries have been predatory and financially unsound. Contracting parties in Europe and the institutions that support them are generally more sophisticated, and because forewarned is forearmed, they are probably less likely to enter agreements that heavily favor the Chinese parties. Overconfidence and desperate circumstances may still leave them vulnerable, however.
- If things go poorly economically for numerous EU BRI countries, the chances of receiving a joint bailout from Brussels would be slim or nonexistent, but it might be possible to negotiate a joint cancelation or modification of the contracts with China because together they would have more leverage.
- If things go poorly politically for numerous EU BRI countries, they would at least save face in the fact that they all went down together. Even if the US, UK, and France exclaim “I told you so!”, the escalating quasi-cold war with China would mean that if circumstances are particularly dire they would assist EU BRI countries however possible to bolster the integrity of the EU. In other words, the political stakes might be too high to let close allies take major political losses.
It appears that joining the BRI may be a low risk, high reward option for some EU countries. In a way, this may mean a geopolitical Prisoners’ Dilemma is unfolding. Time will tell if I’m right and more will follow Italy and Lichtenstein. I’d be happy to be wrong about this, since, after all, “Misery acquaints a man with strange bedfellows,” and some of the Chinese parties lending as part of BRI are strange bedfellows indeed.