A group of civil society organizations has criticized the European Union’s ‘Global Gateway’ initiative, designed to counter China’s Belt and Road Initiative (BRI), as ‘neo-colonialist’ and ‘too pro-business.’

Launched by the European Commission in 2021, the Global Gateway aims to offer countries in the ‘Global South’ a ‘sustainable and transparent investment alternative’ to China’s BRI. By 2027, the EU plans to mobilize €300 billion for investment in infrastructure such as submarine cables, transport networks, and renewable energy, while also promoting reforms that facilitate market access for European companies.

Officially, the Global Gateway is presented as a ‘win-win partnership’ between countries in the ‘Global South’ and European companies. However, a report published last week (8 October) by NGOs, including Counter Balance, Eurodad, and Oxfam, titled Who Profits from the Global Gateway? raises concerns.

European monopolies dominate Global Gateway fund management

“When we think about the Global Gateway, it almost looks like a black box with too much branding,” said Farwa Sial at the launch of the report.

The NGOs particularly criticize the influence of large European companies in fund management and the lack of transparency in decision-making and judicial arbitration, with the Global Gateway Business Advisory Group playing a central role. This group primarily consists of economic actors from Western European countries like Germany, France, Italy, Belgium, and Spain, including companies such as Total Energies and Bayer. Many of these companies also have historical ties to ‘partner countries’ in the Global South, dating back to colonial times.

A new version of the Berlin Conference on the division of Africa

“If you really want to know which companies are active where, just look at who the colonial powers are,” said Paul Okumu, head of the African Platform secretariat, at the same conference. “Germany still wants to do projects in its former colonies. In my country [Kenya], the British are still in control.”

For Okumu, the link between the projects selected by the Global Gateway and the companies’ countries of origin is reminiscent of the Berlin Conference (1884-1885), when European powers carved up Africa. “Basically, what we are doing is Berlin 2.0: dividing the continent into different countries and allocating projects to them,” he argued, suggesting that European countries are repeating the colonial process under the guise of the Global Gateway.

The issue of Africa’s division among imperialist countries in the 19th century, often referred to as the ‘Scramble for Africa,’ seemed to have been resolved with the Berlin Conference. Yet, the decisions made there did not prevent the colonial powers from clashing over their territorial ambitions.

Concerns about deepening debt and inequality

NGOs are concerned that the Global Gateway initiative could exacerbate the debt crisis in some countries.

“We analyzed [this fund’s partner countries] and found that 29 out of 37 are highly indebted poor countries,” said Alexandra Gerasimcikova, co-author of the report and head of policy and advocacy at Counter Balance. “Such projects are really risky,” she added, warning that they could further increase the debt burden on countries already facing serious financial challenges.

Commission representative: Grants alone cannot eradicate poverty

The question of whether loans or grants are the better form of financing sparked a debate between the European Commission representative and the civil society organizations at the report’s presentation.

According to Marlene Holzner, head of unit in the Commission’s Directorate-General for International Partnerships, the Global Gateway seeks new approaches, such as involving the private sector and banks in supporting the development of countries in the ‘Global South.’

“For the last 50 years or more, we have not been able to reduce poverty with the traditional approach of ‘I give you a grant, you get a gift, you don’t have to pay it back.’ […] We need to change our perspective. The Global Gateway is designed to be a paradigm shift, and we are acting based on what we have learned.”

Proposal for a new ‘Marshall Plan’

Criticizing the lack of political will to address global poverty, Sial proposed a new reconstruction plan modeled on the Marshall Plan, which helped rebuild Europe after World War II.

“In my view, the Marshall Plan was based on grants and soft loans, and that is what got Europe back on its feet,” Sial said. “If we really want to make such an offer to the world, I believe it is possible. The money is there, and we can do it.”

Global Gateway criticized for ‘protecting Europe’s strategic interests’

However, the idea of Marshall Plan-style funding did not garner unanimous support from all NGO representatives.

“In this room, we glorify grants. But there is nothing more absurd than giving me $70 billion and taking $480 billion from my continent,” said Okumu.

He argued that the problem lies in the fact that the ‘development fund’ primarily serves to protect Europe’s strategic interests and maintain the competitiveness of its companies. “When you look at policies like the Critical Commodities Act and the Green Deal, they fit perfectly into the Global Gateway,” Okumu noted.

Germany is facing a two-year recession for the first time since the early 2000s, prompting the government to slash its 2024 growth forecast for the Eurozone’s largest economy.

If Economy Minister Robert Habeck’s forecast for this year is correct, Germany will experience a two-year recession for the first time in more than 20 years, after output shrank by 0.3 percent in 2023. In 2002, the economy contracted by 0.2 percent, followed by a 0.5 percent decline in 2003.

“The economic conditions are currently unsatisfactory,” Habeck said on Wednesday. “But we are in the process of finding a way out of this situation,” he added.

The minister argued that Germany has made “real progress” in recent years in addressing the “short-term” factors—rising inflation, high interest rates, and surging energy costs due to the war in Ukraine and subsequent anti-Russian sanctions—that have depressed output.

However, Habeck pointed out that longer-term structural issues, such as “Germany’s serious skills shortage,” years of underinvestment in infrastructure, and excessive bureaucracy, continue to hold back growth.

Habeck, who also serves as vice-chancellor, predicted that GDP would shrink by 0.2 percent this year, a sharp downgrade from an earlier forecast of 0.3 percent growth.

With energy prices falling, ministers and economists had initially hoped the economy would see a temporary recovery this year. But a steady stream of pessimistic data in recent months has clouded the outlook. “The recovery has been postponed once again,” Habeck said.

Citing high labor and energy costs, a heavy tax burden, and political uncertainty, some companies are considering moving production to cheaper countries, raising fears of deindustrialization in Europe’s largest economy.

Despite these concerns, Habeck expressed cautious optimism that the economy would begin to recover next year, as lower inflation and easing interest rates, combined with rising real wages, are expected to boost consumer spending.

The minister suggested that “in the last three to four quarters, people have started to feel wealthier again.”

Habeck’s ministry expects the economy to grow by 1.1 percent in 2024 and 1.6 percent in 2026, driven by stronger private consumption, increased investment, and rising international demand for industrial goods.

However, Habeck emphasized that Germany’s economic challenges run much deeper, noting that the two pillars of the country’s success—cheap Russian gas and well-functioning global markets, both critical for a leading exporter like Germany—no longer exist.

According to Habeck, the first pillar has been undermined by the war in Ukraine, while the second has been destabilized by China’s “aggressive export strategy” and rising U.S. protectionism.

“Half of Germany’s growth has always come from exports, and this pillar is now under threat. We have essentially not grown at all since 2018,” Habeck said.

Despite his cautious optimism about short-term improvements, the Green minister suggested that Germany’s long-term growth potential remains low.

“Even if we did everything right—reduced bureaucracy, had the necessary skilled workers, and secured the needed capital—we would only be looking at a growth potential of about 0.6 percent,” Habeck said.

He attributed this to “the failures of past decades, not just the past few years,” pointing out that successive governments had not invested enough in infrastructure, digitalization, and the mobilization of skilled labor.

German Interior Minister Nancy Faeser announced that the figures for 2024 showed a 23% drop compared to the previous year. She views the decline in asylum applications as “proof that the country’s tough measures are working.”

Last month, Germany reintroduced checks at all internal borders as an exception to Schengen rules.

According to figures released on Tuesday by the Federal Office for Migration and Refugees, the number of applications fell from 27,889 in September 2023 to 18,113 in September 2024.

Faeser praised the figures as evidence that “the measures are working.” She added, “We continue to take steps to limit irregular migration. We are introducing the new Common European Asylum System as quickly as possible.”

The government also plans to implement fast-track asylum procedures at its internal borders to expedite the deportation of asylum seekers who, under the Dublin system, must be returned to the first EU country they entered.

Germany has also supported an EU initiative aimed at reducing obstacles to the deportation of rejected asylum seekers, which will be discussed at a meeting of EU interior ministers on Thursday.

Germany currently tops the list of EU countries with the highest number of asylum applications this year, with 171,000, according to a report by Welt am Sonntag, which cited the EU’s asylum agency. Germany is followed by Spain (123,000) and Italy (117,000).

“This number is still far from what’s needed to alleviate the ongoing strain,” Friedrich Merz, leader of the main opposition CDU party, said on Tuesday. He emphasized that all asylum seekers arriving under the Dublin rules should be turned back at the border.