EU urged to expand investment scope

By FU JING | | Updated: 2017-06-09 23:12

EU urged to expand investment scope

Mark Eyskens describes China's Belt and Road Initiative as an invaluable aid for global needs. Provided to China Daily

New trade pact with China ‘would be welcome', former Belgian leader says

With the Belt and Road Initiative now globally recognized, the European Union should further explore "ways and means" to invest in big infrastructure projects worldwide with China, according to Mark Eyskens, former Belgian prime minister.

The 84-year-old economist says the EU is enthusiastic about the free trade agreement reached with Vietnam, and adds that the next agreement must build further on this accomplishment interms of legal security, market access and dispute settlement.

There is a huge need to build — to construct infrastructure such as railways, ports, roads to ports, airports — and this will be very costly, and it will not be easy to arrange the required financing, Eyskens told China Daily at his office in Brussels.

The scholar and European political expert, who has published 58 books, says the essential global economic issue of today is investment, because the world's population will reach 10 billion by the end of this century.

He described China's Belt and Road Initiative as an invaluable aid for global needs.

He says the problem Europe has today is a lack of investment, because the bloc has other priorities. It has spent a lot of money on pensions and healthcare, although the European Union has made some effort to increase investment by earmarking money for the European Investment Plan (2015-17).

But he says it is not targeted enough and the money was not always used in the most efficient way. In fact a European Court of Auditors report criticized the European Commission's approach. There is a need to elaborate a grand strategy to truly create innovation and employment by stimulating intercontinental cooperation.

"The big infrastructure projects that can really spur innovation and growth are outside Europe, and many are in Asia and China," Eyskens says.

He says the Belt and Road Initiative is very important for the European Union, which needs to find the ways and means to reorient European investments to the big projects in the world.

"For instance, how Europeans should get involved in building airports, seaports, big channels and canals and so on is very important," Eyskens says.

Eyskens says Europeans are extremely interested in what China is doing, including the way that Beijing finances investment. In that regard, Eyskens says what China had done in creating the Asian Infrastructure Investment Bank is "very important".

"With some European countries becoming stakeholders in the bank, this may become a great instrument for all," Eyskens says. "Investment must be a two-way street, with long-term benefits for all, embedded in multilateral agreements regarding fair trade, legal security, in-country value and corporate social responsibility."

If that can be done, he says, the European Investment Bank can possibly work as a partner. During the Belt and Road Forum for International Cooperation in Beijing on May 14 and 15, the European Investment Bank signed a cooperation agreement with the Chinese government.

"We've tried to convince the European Investment Bank also to go outside Europe, to Asia, where most of the world's economic growth is realized, and thus where innovation and employment are created."

He says that in 2013 the European Council decided to consider ways to assist European industries — as the Chinese and Japanese governments do — to acquire major infrastructure contracts through competitive long-term loans.

"This may happen in the near future and make AIIB and Europe truly complementary," Eyskens says.

Apart from infrastructure projects, Eyskens also suggests both sides can cooperate on big data, digital devices and all that has to do with modern communications and scientific research.

"In addition, it is also important to invest in brains — and that requires, of course, education and research exchanges of scholars, professors and students," Eyskens says.

He says the University of Leuven, where he was chairman between 1971-76, is hosting about 2,000 Chinese students, and many Belgian students are studying in China.

"That's wonderful for building the future together and learning from each other," he says.

Eyskens has been to China several times. When he was finance minister in the late 1970s he visited China and was impressed by the great changes made in the following decades.

He says China's reforms struck him as having transformed the populous country, and that Deng Xiaoping was a "very, very great statesman". He urges the EU to construct "a web of free trade agreements" with other economies.

"In front of a dilemma between a web and a wall, many people today are what we call the victims of globalization — think they have to replace the web by walls surrounding countries, which is psychologically explicable, but makes no sense at all," he says, calling himself a European federalist.

"It is counterproductive and it's against the future, so we have to save our webs over and destroy the walls," he says.

With China and the EU considering a bilateral investment pact, Eyskens strongly believes that new French President Emmanuel Macron may support a free trade agreement between the EU and China.

He says the Trans-Pacific Partnership — a trade deal led by former US president Barack Obama with Asia-Pacific economic giants — is "dead", but the EU is ready to announce the restart of the talks of the Transatlantic Trade and Investment Partnership between the EU and US.

"This is in the best interest of both partners," he says.

As a European federalist, he believes the EU still needs to do a lot of work to build itself into a strong bloc.

In 1991, Eyskens, as Belgium's foreign minister, says Europe was an economic giant, a political dwarf and a military worm. Asked after 26 years if his views have changed, he responds: "My answer is no, no and no. I was indeed right then, and I am still right now with that sentence."

He continues: "We have no seat at the table of the Security Council. Germany is not at the table, while Germany is the biggest economy in Europe. So this is quite unbalanced indeed. In military terms, Europe is simply insignificant."

To change the situation, Eyskens urges an increased investment in defense, infrastructure and big research projects at the European level.

He says the European budget is 1 percent of European GDP, whereas the federal budget in the United States represents 27 percent of the country's GDP.

"So we have to increase the European budget. And then, of course, the national governments could lower their national budgets and lower their taxes; and, of course, the European Parliament should vote some taxation," Eyskens says.

His father Gaston Eyskens (1905-88) served six times as Belgian prime minister after World War II. At the age of 12, the young Mark Eyskens was introduced to then-British prime minister Winston Churchill during a visit to his father's house in Belgium. He remembers seeing the great statesman sitting in a chair and found him inelegant. He says he saw a rather fat old man chewing a big cigar.

"I had hoped for some important sentences that I would remember my whole life, but Churchill was half asleep," Eyskens recalls. "And he just says that I was a nice boy."

The person Churchill called a "nice boy" is now turning 84, having served as prime minister of Belgium in the 1980s and — as his father did — in many other cabinet posts for 16 years. He says he greatly benefited from being "in politics and with politicians since boyhood, because everyone came to my father's house".

Sitting in the 19th century office of the PA International Foundation about five-minutes from European Union headquarters, Eyskens says his lifelong career as politician in various posts has taught him how to compromise, which informs his role as foundation chairman, overseeing humanitarian projects and identifying solutions to issues of public health in several parts of the world.

But what has been most astonishing is his prolific writing. He is the author of almost 60 books on politics and economics.


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