Pandemic could mark a watershed moment in the EU’s Relationship with the wider World

The ties that bind the U.S. and Europe date back in earnest to the Second World War, when America came to the rescue of Europe both militarily and financially, setting up a partnership that would last for 75 years.

But as both powers struggle with the coronavirus pandemic, their most severe crisis since the war, this relationship doesn’t look as strong as it once did.

While the U.S. keeps its focus on fighting the disease at home, China has continued offering aid to Europe, extending its influence through a mixture of soft power and propaganda. When the crisis subsides, the U.S. may find that its greatest ally has drifted further away from its sphere of influence.  

China is targeting in particular the EU’s worst-hit countries: Italy, Spain and Greece. They may find it impossible to resist Beijing’s help in their hour of greatest need. Italy is the country suffering most from the outbreak, with more than 8,000 registered deaths from Covid-19.

The death toll in Spain is also climbing fast, as Madrid struggles with overcrowded hospitals and a limited number of intensive care units. And while Greece’s outbreak is more contained for now, with 26 deaths, Athens is worried about the strength of its health care system after a decade of austerity and swingeing budget cuts.

Beijing has seized the opportunity to offer assistance. Chinese President Xi Jinping has spoken to Giuseppe Conte and Pedro Sanchez, the Prime Ministers of Italy and Spain, offering his support.

Beijing has sent face masks, test kits and ventilators to Greece, Spain and Italy some as donations, others as sales as all countries face shortages of medical supplies. Luigi Di Maio, Italy’s foreign minister and former leader of the Five Star Movement, is trumpeting China’s help, on the back of his party’s cozy relationship with Beijing.

The contrast with U.S. action is striking. America has offered very few signs of support toward southern Europe. Yes, a few U.S. non-governmental organisations have set up camp hospitals in Lombardy, and U.S. Secretary of State Mike Pompeo has called Di Maio to express support for Italy.

But these are small gestures compared to those of other countries: Some 50 Cuban doctors landed in Milan last week, and Russia sent Italy nine military planes loaded with medical equipment (a sticker on the fuselage noted, “from Russia with love”).

Of course, the U.S. and China are at very different stages of their fight with Covid-19. China is recording few new cases daily, most of them imported and is moving to restart economic activity.

The authorities announced that in two weeks they will lift the lockdown in Wuhan, where the pandemic started. Conversely, the U.S. is now struggling with a surge in cases, which recently surpassed 80,000.

A number of states, including California and New York, have enforced lockdowns, which are already hitting the economy hard.

However, it’s also clear that U.S. President Donald Trump has very little interest in cultivating America’s traditional alliance with Europe, whereas China very much wants to strengthen its ties to the region.

And as Trump uses the coronavirus crisis to further antagonise China, he is doing little to counter what the country is doing to charm the rest of the world.

Beijing’s charm offensive in Southern Europe didn’t start with the epidemic. After the financial crisis, Chinese conglomerates invested heavily in Portugal and Greece, purchasing valuable assets in banking, utilities and logistics including the port of Piraeus.

China built on these inroads as it expanded its Belt & Road Initiative, the controversial infrastructure program aimed at boosting links between Asia, Africa and Europe.

In 2019 Italy became the first G7 country to sign a memorandum of understanding with Beijing, opening the way to a closer economic partnership.

Even though Italy backtracked on some of the most controversial aspects of the deal, such as development of the country’s 5G network, the agreement marked a significant victory for Beijing.

To be sure, China still faces an uphill battle in conquering Europe’s hearts and minds. Although the country suppressed its domestic outbreak quickly, it will be impossible to forget where the pandemic initially originated and got out of control.

European governments are also launching a number of measures to protect their own companies from foreign takeovers at a time of economic and financial stress.

And even before the coronavirus, the EU was becoming warier of foreign investment from China: Last spring, it declared Beijing a “systemic rival.” The current crisis could reinforce that tendency.

It’s equally possible that governments from Italy to Germany will see no alternatives to appeasing Beijing. As the U.S. battles the pandemic, it should pay attention to what is happening in Europe. If it doesn’t, “America first” could become “America alone.”

Friendships are forged in crises but crises can damage them too.

Author: Ferdinando Giugliano writes columns on European Economics for Bloomberg Opinion. He is also an Economics Columnist for La Repubblica & was Member of Editorial Board of Financial Times.
Editor’s Note: The article reflects the author’s opinion only, and not necessarily the views of editorial opinion of Belt & Road News.