Trade war between US and EU and recession – Draghi calls for investment program: Time for an European Silk Road Marco Polo 2.0

Trade war between US and EU and recession – Draghi calls for investment program: Time for an European Silk Road Marco Polo 2.0

While the US-China trade war is making headlines almost daily, there is little talk of Trump’s now-imposed tariffs on Airbus and agricultural products. Nobody speaks of trade war. Apparently, one hopes that the auto industry, mechanical engineering and the chemical industry will be spared, which are the real backbone of German industry. But in the media one hears little about it. Everyone avoids the term and the word trade war.

In this context, it is also noticeable that now many politicians and even ECB President Draghi are in favor of an investment program. This is likely to be demanded in view of the coming recession because of the cyclical overproduction crises of capitalism, which are exacerbated by the trade war. because the instruments of the ECB, such as the purchase of debt securities and zero or negative interest rates are exhausted and you probably want to counteract by Keyensian investment programs in recession times. Meanwhile, the austerity and black zero policy is increasingly under attack – lately not only on the left but also on the part of such economic liberal institutes such as the DIW and conservative politicians to CSU-Söder.

In addition, there is an investment backlog that places Europe in the midfield as far as digital infrastructure is concerned. Many politicians are also worried about the nation’s competitiveness in terms of digitalization.

It would be time to Europeanize the demands for an investment program and, in response to China’s New Silk Road, to initiate an own European Silk Road Marco Polo 2.0, which equips Europe with the necessary traditional and digital infrastructure, jobs and prosperity, revitalises the EU’s prosperity promise and gives Europe a concrete project and thus a vision .

Such an European Silkroad Marco Polo 2..0 could not only revitalise Europe, but also reach out to Eurasia and Russia. The Vienna Institute for Economic Studies (WIIW)  has already laid out a concrete blueprint for an European Silkroad in the working paper of July 2018 „The European Silkroad“ by Mario Holzner (Koordinator), Philipp Heimberger and Artem Kochnev. Germany´s important conservative daily newspaper „Frankfurter Allgemeine Zeitung“ asked in a programmatic article „Why not an European Silkroad?“. These could be starting points for such a visionary program which could be combined with a New East Policy (Neue Ostpolitik) which defines Ukraine and Bellarussia as neutral brigde states between the Eurasian Economic Union and the EU and an Eco-alliance between the EU and Russia.

Obstacles to a European Silk Road are

– The financing of the megaproject
-the absence of a central European state and a relatively small EU budget
-the neo-liberal orientation of the EU
-the false pride of the Europeans to copy something from China
-Ecological concerns and growth criticism
-the postmodern Euroscepticism that no longer believes in progress
-The controversy of the Europeans
-The decreasing ability and willingness to realize major projects (BER Berlin-New Airport Beijing / Istanbul
-missing charismatic visionaries
Reasons for this are:
– The financing could be organized on the model of the Asian Infrastructure Investment Bank (AIIB), bringing together some of the EU’s past single funds, as well as involving the European Investment Bank and the Cohesion Fund.
– The growing criticism of neoliberalism and lean state also on the part of former neo-liberals
– The investment backlog, the fallback of Europe in traditional and digital infrastructure as well as the de facto existence of the Chinese Silk Road project as a direct challenge
– The foreseeable end of the monetarism, as ECB chief Draghi is now demanding a Keynesian investment program, as well as liberal business institutions and conservatives are now calling for investment programs
– the increasing awareness that something must be done against the economic polarization in Europe

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