In May this year at the Leader’s Meeting in Porto, the European Union (EU) and India adopted the Connectivity Partnership, expanding our cooperation across the digital, energy, transport, and people-to-people sectors. Our partnership is centred on transparency, sustainability, equity and inclusivity for the benefit of both regions, in order to create links, not dependencies.
What exists and more
With India, we already have a strong ongoing collaboration on sustainable infrastructure. For instance, the European Investment Bank (EIB) has financed over €4.31 billion in the country since 1993, including significant connectivity projects. New operations are in the pipeline, such as further EIB investments in urban metro systems.
The EU is working in the same spirit across the world. Earlier this year, the EU and Brazil inaugurated a new fibre-optic cable to carry terabytes of data faster and more securely between our two continents. This helps scientists in Europe and Latin America to work together, on issues from climate modelling to disaster mitigation. The cable starts in the EU, where the EU’s General Data Protection Regulation (GDPR) became the gold standard of data protection, and ends in Brazil, which recently introduced a similar law. The cable links two continents together building a data economy that respects the privacy of its citizens’ data. This is how Europe approaches connectivity — bringing partners together without creating unwanted dependencies.
Last week, the EIB and the cooperation agencies of France, Spain and Germany joined the European Commission in Togo to identify projects to finance in the energy, transport and digital sectors. During the mission, the EIB signed a €100 million credit line to support African small and medium businesses to recover from the pandemic and to seize growth opportunities from the African Continental Free Trade Area (AfCFTA).
These are just examples of what we call Team Europe, bringing together all those who work with our partners to support the green and digital transition.
Since the start of the von der Leyen Commission, the twin transitions of green and digital in Europe have been at the forefront. With the new Global Gateway strategy, the EU continues to promote the green and digital transition at the global level.
In a world of interdependence, where supply chains are showing their fragility, we know how important connectivity is. We have also seen how the links that connect us can also be weaponised. Data flows, energy supplies, rare earths, vaccines and semi-conductors are all instruments of power in today’s world. Which is why we need to ensure that global connectivity and access to these flows is based on rules and international standards.
While flows in goods may be ideologically neutral, the rules which govern them are intertwined with political values. Particularly in the digital domain, Europe and other democracies must ensure that the standards of the future reflect our core values.
No ‘debt traps’
Europe wants to reduce excessive dependencies and be more autonomous in areas such as the production of computer chips. Our autonomy is reinforced if all our partners have alternatives when making their investment decisions. Europe’s calling card and offer to our partner countries to address infrastructure investment needs is financially, socially, and environmentally sustainable connectivity. No ‘white elephants’ and no ‘debt traps’, but projects that are sustainable and serve the needs of local populations.
For Europe to master the connectivity challenge, it needs not only principles and frameworks but also adequate resources and clear priorities.
First, we will use the resources of Team Europe, the EU and its Member States in a smarter, more efficient way. The Global Gateway will mobilise investments of more than €300 billion in public and private funds for global infrastructure development between 2021 and 2027, financing the climate and digital transition, as well as health, education and research. We will mobilise half of the investments with the help of the EU budget and the other half indicates the planned investments from European financial institutions and Member States’ development finance institutions.
We have remodelled our financial tools to provide the firepower that can blend loans and grants and provide the guarantees needed today. We put in place mechanisms to filter out abnormally low tenders and protect against offers that benefit from distortive foreign subsidies, which undermine the level playing field. We will also ensure that EU internal programmes — InvestEU, our research programme, Horizon Europe and the Connecting Europe Facility — will support Global Gateway, alongside Member States’ development banks, national promotional banks and export credit agencies.
An export credit facility
Of course, capital from the private sector will remain the biggest source of investment in infrastructure. That is why we are exploring the possibility of establishing a European Export Credit Facility to complement the existing export credit arrangements at the Member State level. This would help ensure a more level-playing field for EU businesses in third country markets, where they increasingly have to compete with foreign competitors that receive large support from their governments.
Second, on the priorities, Global Gateway has identified a number of flagship projects. These includes the extension to the BELLA (Building the Europe Link to Latin America) cable to the rest of the Latin America, as part of the EU-LAC Digital Alliance; the expansion of the Trans-European Network to improve transport links with the Eastern Partnership and Western Balkan countries and scaled-up funding for the Erasmus+ student exchange programme worldwide. In Africa, along with support for new strategic transport corridors, the EU will mobilise €2.4 billion grants for Sub-Saharan Africa and over €1 billion for North Africa to support renewable energy and the production of renewable hydrogen, which can help meet the EU’s projected demand for clean energy and help partners to do the same.
At heart, the Global Gateway is about demonstrating how democratic values offer certainty and fairness for investors, sustainability for partners and long-term benefits for people around the world. The EU and India can be leaders in this endeavour.
Josep Borrell Fontelles is High Representative of the EU for Foreign Affairs and Security Policy/VP of the European Commission. Jutta Urpilainen is European Commissioner for International Partnerships