EU and Japan Sign Agreement Strengthening Eurasian Cooperation

EU and Japan Sign Agreement Strengthening Eurasian Cooperation

On Friday, the EU and Japan signed an infrastructure agreement to coordinate transport, energy and digital projects linking Europe and Asia in search of an alternative to Chinese dominance in the region, which worries Brussels and Tokyo.

The agreement signed by Japanese Prime Minister Shinzo Abe and European Commission President Jean-Claude Juncker formalizes Japan’s participation in the new «communication plan» between the EU and Asia, which will be supported by an EU guarantee fund of € 60 billion ($ 65.48 billion), development banks and private investors.

«Whether it’s a separate road or a separate port, when the EU and Japan do something, we are able to build a sustainable, regulated link between the Indo-Pacific region and the Western Balkans with Africa», – said Abe in Brussels at the EU-Asia Forum.

Since 2013, China has launched construction projects in over 60 countries known as the initiative «Belt and road», establishes a network of land and sea links with Southeast Asia, Central Asia, the Middle East, Europe and Africa.

«The sea route leading to the Mediterranean and the Atlantic must be opened», – he added, referring to the need to resist Beijing-funded projects, its huge foreign exchange reserves, allowing it to create a dominant position in the field of transport routes.

Juncker also promised to help build infrastructure «without a mountain of debts» or support «per country».

It was a veiled hint of China-funded projects that pushed up debt in some Central Asian and Balkan countries after they began building bridges, roads and tunnels they could not afford..

EU and Japan Sign Agreement Strengthening Eurasian Cooperation

EU and Japan also want to tighten environmental standards.

EU officials said they are concerned about what is considered the Chinese investment model, which gives countries credit for projects they may not need, making them dependent on China. Poor Asian and African countries take advantage of attractive Chinese loans.

A China-funded motorway linking Montenegro’s Adriatic coast with landlocked neighboring Serbia has run into so much debt to Montenegro’s budget that the International Monetary Fund told the country that the project could not be completed..

While not all European and Japanese money will be spent in Asia, the Commission’s strategy views infrastructure linkage spending as official EU policy in the Asian region affecting the EU’s overall budget..

In their 10-point agreement, the EU and Japan pledged «pay close attention» «budgetary capacity and country debt sustainability».