Is the EU’s COVID-19 Response Losing Central and Eastern Europe to China?

World Politics Review, 08.05.2020
Aryaman Bhatnagar, analista de política internacional

A billboard at a municipal office building showing Serbian and Chinese flags reading: “Iron friends, together in good and evil!” in Belgrade, Serbia. (AP/Darko Vojinovic)

China has made concerted attempts recently to rewrite the global narrative about the coronavirus pandemic, especially its own lack of transparency about the early outbreak in Wuhan, in order to project an image of itself as a responsible global power. It has shipped medical supplies to help countries around the world contain the virus’s spread, and has launched a far-reaching disinformation campaign about the origins of the contagion and China’s response to it.

Europe has been at the heart of these efforts. Chinese state media outlets have insinuated that Italy was the source of the novel coronavirus, while Beijing has faulted European countries for their allegedly poor crisis management and supplied medical aid of poor quality. All this has caused a backlash in some quarters of Europe.

As a result, China’s relations with the European Union are likely to become more strained in the post-coronavirus era. At the same time, Brussels fears that Beijing could use the coronavirus pandemic and the economic fallout as an opportunity to further its political and economic influence among the financially weaker Central, Eastern and Southern European countries. This applies not only to full-fledged EU member states, but also to those seeking to join the bloc, in the Balkans for example.

In late March, the European Commission issued guidelines for its member states to protect critical sectors of their economies against the increased risk of foreign takeover stemming from the pandemic’s economic shocks. While the document does not specifically mention China, EU officials are concerned that China would seek to increase its economic footprint in Europe, just as it did in the aftermath of the 2008 global financial crisis. Since then, Chinese investors have slowly built up an impressive investment portfolio across Europe. Given the economic impact of COVID-19, European companies across the continent may be in a similarly vulnerable situation to 2008.

At the same time, a number of European countries will require massive financing to rebuild their economies in the immediate aftermath of the health crisis. The promised EU assistance may not be enough, compelling these countries to turn to China. For poorer countries in Central and Eastern Europe, Chinese capital has the added benefit of financial independence from Brussels and comes with fewer financial strings attached.

For the EU, however, it means an increase in China’s political influence among these countries. Before the pandemic, China had managed to leverage its investments to carve out significant political influence for itself within the so-called 17+1 group, a loose forum of Central and Eastern European countries—including 12 EU members—plus China. Officials in Brussels are critical of this grouping as it prevents the EU from adopting a unified approach to China. In the past, for instance, Hungary and Greece, both EU members, have either diluted or blocked EU resolutions that sought to criticize China’s political activities or its human rights record.

The EU is concerned about how China may use its “mask diplomacy” in Europe to further this influence. Despite some backlash, China’s medical aid has been welcomed in the EU’s hardest-hit countries, like Italy and Spain, as well as parts of Central and Eastern Europe. The bloc’s foreign policy chief, Josep Borrell, alluded to those worries in a recent blog post, in which he warned of “a geopolitical component,” as he put it, “including a struggle for influence through spinning and the ‘politics of generosity.’” He singled out China, which he said “is aggressively pushing the message that, unlike the U.S., it is a responsible and reliable partner. In the battle of narratives,” he added, “we have also seen attempts to discredit the EU as such and some instances where Europeans have been stigmatized as if all were carriers of the virus.”

The EU’s objective to stay unified on China is likely to be further undermined due to the lack of solidarity shown by some of its richer member states, including France and Germany, toward their neighbors during the early stages of the pandemic. The export restrictions on medical equipment that they adopted, for instance, led the president of Serbia, a prospective future EU member, to denounce European solidarity as a “fairy tale.” The reluctance of some of the wealthier EU nations to pool European debt and issue “coronabonds” to aid countries like Italy and Spain has also generated ill will. Italian Prime Minister Giuseppe Conte even warned that if the EU doesn’t “support the entire European economy” during the pandemic, “the whole EU project will lose its raison d’être.”

In contrast, some European leaders, especially those who already had euroskeptic views, have loudly praised Beijing’s quick response in sending aid. They include Czech President Milos Zeman, who proclaimed last month that “China was the only country that helped us.” Hungarian Prime Minister Viktor Orban remarked in a radio interview in late March that he was not looking to the EU for help, “because that doesn’t work,” saying instead that he had “people at airports from Beijing to Shanghai.”

Since then, the EU has stepped up its response out of an apparent awareness of the necessity to foster unity among its member states and counter the euroskeptics. Last month, it announced an economic stimulus package worth around $580 billion to cover unemployment benefits, provide security to struggling small businesses and—crucially for heavily indebted countries in Central, Eastern and Southern Europe—access to loans from the eurozone bailout fund. While a broader pooling of debt still seems unlikely, European leaders are backing the temporary solution of EU-issued bonds where countries give financial guarantees through the EU budget. Late last month, the European Commission announced a $3.5 billion financial package for countries in the Western Balkans, many of which are currently negotiating EU accession. “Their future clearly lies in the European Union,” the president of the European Commission, Ursula von der Leyen, said in a statement announcing the aid.

EU countries are also taking in patients from other member states, providing protective gear and medical supplies across borders, and repatriating stranded citizens to their home countries. The European Commission has set up a dedicated website, under the banner of “European Solidarity in Action,” to document the neighborly measures undertaken by the bloc and its members. Von der Leyen has claimed its recent response shows Europe to be “the world’s beating heart of solidarity.”

Yet it is perhaps too early to say whether it will be enough to win over the continent’s euroskeptic leaders. The EU itself came under fire recently for its stance toward China, when The New York Times reported that Brussels capitulated to pressure from Beijing and softened the tone of a public report on disinformation campaigns related to the coronavirus. This could open Brussels up to charges of hypocrisy.

At the same time, it is not inevitable that China’s influence among poorer European countries, like those in the 17+1 grouping, will continue to increase. Many of these countries have already complained that some of China’s past promises have gone unfulfilled. In reality, Chinese flows of foreign direct investment into Europe have fallen over the past three years. Beijing’s long-term prospects in Europe consequently depend both on how its own economy bounces back from the pandemic, and EU leaders’ ability to maintain cohesion in the post-coronavirus era.

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