Investments from China in some countries of the Western Balkans cause concern in the European Union, due to political, social and economic implications, but the countries of the region are also free to choose their partners.
Such a message was repeated these days in the EU, when they were asked about the problems encountered by Montenegro due to a large loan received from China for the construction of a highway.
In principle, Chinese investments for the European bloc would not present a problem, if they were in accordance with European standards, including the rules of public procurement, market competition and respect for workers’ rights. However, many loans from China as well as other projects in the countries of the Balkan region have been seen by the EU as China’s attempt to spread its economic and political influence in the region.
The most recent example of problems with Chinese investments is that in Montenegro. The Deputy Prime Minister in Montenegro, Dritan Abazović, during a visit to Brussels, had asked for help from the EU to return the loan to China.
However, the EU now says that “they are ready to help with various programs for fiscal stability”, but not to return the loans that Montenegro or any other country in the region received from a third partner.
“The EU is concerned about the socio-economic and financial effects that Chinese investments can have. There is a risk of macro-economic imbalances and dependence on borrowing”, said the spokeswoman of the European Commission for Enlargement, Ana Pisonero.
The part of the highway in Montenegro, which is being built with the loan from China, is expected to connect Podgorica with Kollašin. The final highway project creates a connection between the northern and southern part of this state.
The Chinese company CRBC is building the first part of the highway and the Chinese bank EXIM has given a loan to Montenegro in the amount of 809 million dollars, the payment of which will start in the middle of this year.
On March 31, Finance Minister Milojko Spajiq confirmed that the government was negotiating an additional loan with EXIM bank, in the amount of 127 million euros.
According to the data of international organizations, in 2020, China invested in Montenegro more than the total investments made in the last decade. Chinese investments in 2020 reached the value of 71.2 million euros, while since 2010 the total investment was 78 million euros.
In the EU, they have clarified several times that their willingness to help should not be understood as a willingness to return the debt that any country has received.
The other EU spokesman, Peter Stano, recalled how in Montenegro and many other states of the region, the European bloc is not only the biggest investor, but also the biggest donor of financial aid as well as the main trading partner. .
Stano recalled that for investments in the Balkans, through a special program, the EU has also mobilized nine billion euros. The idea of this program of the European Commission is that these investment tools encourage other potential investors from the European Investment Bank, the Bank for Reconstruction and Development, but also private investors.
The case of the construction of the highway in Montenegro is an example of how Chinese investments are conditional. Credit for this project was provided by the Chinese bank EXIM, while the project is being implemented by a Chinese company. This loan, for the construction of this highway, must be returned by the state of Montenegro.
As an opposite example, when EU money is invested, but there is no condition on who should return the loan, there is the project for the construction of the bridge over the Pelashac peninsula, on the coast of Croatia. This project to a large extent, or 85 percent of the value, is financed by the money of the European Union, which was taken from the funds for infrastructure and regional development projects.
However, the project to build this bridge has been won by a company from China. Despite the fact that this had caused dissatisfaction among some European companies, the European Commission had not found any evidence that in this case any rules of the European bloc had been violated.
The European Union itself reached an investment agreement with China at the end of 2020. But this agreement has been criticized by EU countries, because it is suspected that it does not include the respect and protection of workers’ rights in China, which is thought to give Chinese companies a privileged position in the this direction.
In the European Parliament, concern has also been expressed several times about the consequences of some investments from China in Serbia. The investment in the Bori mine has raised concerns about non-compliance with environmental protection standards.
China has also invested in other infrastructure projects in Serbia, where it is suspected that these projects were contracted without public announcement and without the possibility for European companies to compete for these projects.
Recently, China is trying to increase its influence in the Balkan region through the provision of vaccines against the disease COVID-19, which have been produced in this country. China has distributed the largest number of vaccines to Serbia, despite the fact that the number of vaccinated inside China is smaller than the average in the EU.
China is trying to strengthen its economy through the “Belt and Road” initiative, but also to extend its economic and political influence in countries around the world. This initiative includes multi-billion dollar infrastructure projects. Recently, Chinese officials have said that this initiative will expand to new horizons, such as medical diplomacy, but also the change of focus to technology and foreign aid.
Since 2019, the EU has begun to warn the Balkan countries, saying that the goal of membership in the bloc “must be a strategic choice, without a doubt also with commitment”. In the EU, the growing influence in the region of Russia and Turkey, as well as some countries from the Middle East, which are also trying to extend their influence through various projects, has not been seen with sympathy.
Despite its concerns, the EU has reiterated its position that each sovereign state has the right to choose its partners and investors. But, on the other hand, those states, if they want to make progress in the integration process towards the EU, must respect the bloc’s high standards, including those for large infrastructure projects. /rel/