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Emerging Europe starts to question wisdom of Chinese-funded infrastructure projects (Emerging Europe)
October 26, 2018
By Tamara Karelidze
From the article:
A number of emerging Europe countries which have agreed big money infrastructure deals with China are beginning to reconsider their options. Members of the so-called 16+1 group, which includes 11 European Union member states (Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia) and five Western Balkans nations (Albania, Bosnia, Macedonia, Montenegro, Serbia) are increasingly concerned at what they see failed Chinese promises and unacceptable conditions placed on finance.
The 16+1 group was set up in 2012 by China as a means to attract Chinese investment in infrastructure – mainly roads and rail networks – and to boost their economies. Many countries initially viewed the investment as having far fewer strings (and requiring less transparency) than European Union money. A major new report by Bloomberg suggests that they were wrong, and that alternatives, such as the European Bank for Reconstruction and Development (EBRD) may be better.
“Some of those projects that have materialised with Chinese help have attracted unwelcome attention. Mounting costs for a highway development in Montenegro prompted the Washington-based Center for Global Development to single out the country as ‘at particular risk of debt distress,’ while the tender for an as-yet unfinished high-speed rail link between Budapest and Belgrade prompted an EU commission probe,” writes Bloomberg.