Despite being a member of the G-7 and one of the world’s largest economies, Italy is infamous over the past few decades for its struggling economic situation. The GDP growth rate since has been less than one percent over the past decade while unemployment has hovered just over 10 percent.
Economic stagnation, coupled with concern over high rates of migration from Africa, have dominated Italian politics and have caused a shift toward right-leaning, populist candidates as demonstrated by the election of Giuseppe Conte as Prime Minister last year.
Determined to demonstrate he is capable of turning around the Italian economy, Conte, alongside Matteo Salvini — the Deputy Prime Minister of Italy and whom many consider the true leader of the country — have taken what the West considers a drastic and potentially dangerous step: joining China’s infamous One Belt, One Road Initiative (BRI).
This past Saturday, President Xi Jinping of China was in Rome to sign a non-binding agreement with the Italian government. In joining the BRI, Italy secured itself 29 separate contracts with China worth some $2.8 billion in a variety of sectors. For Italy, the inflow of investment will allow it to invest in its crumbling infrastructure and hopefully rejuvenate its sluggish economy.
In spite of the ostensible benefits, many of Italy’s close European allies and the United States are highly skeptical and have expressed disappointment in Italy’s decision to cooperate with China, whom they view as a potentially dangerous adversary. U.S. Secretary of State Mike Pompeo, for example, noted he was “saddened” by the Italian government’s decision.
The West’s disappointment with Italy’s decision is not entirely based on geopolitical rivalries, however. There are genuine concerns about what cooperation with China will mean for Italy moving forward.
It has been speculated the BRI initiative is as much an attempt by China to force countries into their sphere of influence by creating rising debts as it is a genuine effort to revolutionize infrastructure and interconnectivity.
Italy, which has the second-highest GDP to debt ratio in Europe at 133 percent, is already struggling under the weight of its debts. Accepting a $2.8 billion investment from China, therefore, may not be a wise fiscal move for Italy.
The subject of greatest concern, however, is what this decision means for American hegemony. While the BRI has been immensely successful thus far with well over 100 countries signing on, China had yet to reach an agreement with a G-7 country.
The deal with Italy, therefore, has great symbolic significance for China as well as economic significance. Economist Rory Green told CNBC the deal was a “really big coup for Xi Jinping,” stating, “it will give him a foothold in the heart of Europe.”
Now that Italy has broken the mold and committed itself to the BRI, it’s entirely possible other economies in the G-7 may follow suit and abandon their unofficial embargo of the project. Michele Geraci, Italy’s under secretary for economic development, seems to think this may be the case, stating, “once the first domino topples, the others will follow.”
China seems to be firmly aware of the significance of this contract and is unabashed in articulating its intents to oversee the downfall of American unipolarity and hegemony. Xi expressed this desire by stating, “a united and prosperous Europe corresponds to our vision of a multipolar world.”
China’s BRI is the foremost tool Xi is employing to achieve a multipolar world.
Whether the intent of the initiative is to foster genuine economic ties throughout Eurasia or to take control over other countries’ politics by shrewdly forcing them to acquire insurmountable debts is ultimately irrelevant. What truly is significant is the BRI’s expansion into the G-7 clearly demonstrates that Chinese economic might is on par with that of the United States.
While the United States may be “saddened” by these developments, they cannot plausibly argue they presented Italy with a better alternative. After all, because of its honorific role as the economic hegemon, the United States is at least partially responsible for Italy’s economic struggles.
If the U.S. government or private corporations had been able to provide Italy with investment funds, it is highly unlikely Rome would have felt an incentive to join the BRI.
The fact that the United States could not do this, however, demonstrates it is losing its grip over Europe and shows that multipolarity is rapidly becoming the reality of global politics.