In a deal that has surprised many, Italy has signed on to become a part of China’s Belt and Road Initiative (BRI). President Xi Jinping met recently with Prime Minister Giuseppe Conte, and the two leaders reached an agreement, signing a Memorandum of Understanding (MoU) to allow for: greater cooperation in banking ventures, partnerships enabling construction of Italian ports through a partnership with a Chinese construction company, and an increase of fruit exports to China. Italy is the first of the Group of Seven (G7) nations to sign an MoU with China, and the decision has created controversy among its allies. The move has left Washington and Brussels upset with the agreement, and many have concerns that China is preying on Italy’s present economic condition for its own benefit.

Political and economic affairs commentator Einar Tangen spoke about the motivation behind Italy’s decision to join the initiative in an interview with Al Jazeera, stating that “Italy has issues where it is not happy with the EU and the EU is not happy with it, and the only way out of this conundrum is for [Italy] to expand their trade.” However, not all of Italy’s allies considered the agreement to be so beneficial to Italy’s trade needs. The White House National Security Council released a tweet about the matter, stating that “[e]ndorsing BRI lends legitimacy to China’s predatory approach to investment and will bring no benefits to the Italian people.”

The Belt and Road Initiative presents a number of concerns for the troubled European nation going forward. The first is the strain it will place on the relationship between Italy and some of its allies. While Italy is not the first European nation to be a part of the Belt and Road Initiative, it is the first of the G7 to sign on to China’s plan, which may create issues within the alliance, especially with the United States. The deal has also faced resistance from Brussels and even within Italy itself, with Italy’s Deputy Prime Minister Matteo Salvini already expressing fears of China “colonizing” Italian markets.

Italy has been in the throes of a recession since November of last year. This economic downturn was the result of over a decade of decline from Rome, due to a rising debt that now amounts to more than 2.3 billion euros. Much of this can be traced back to local economic models that favour family-owned, smaller scale businesses with minimal employees, while larger businesses are more resistant to changes in corporate culture. This, combined with high debt spending and the fact that the government seems to have exhausted every other option, has likely made the Belt and Road Initiative highly appealing to President Conte.

By joining the Belt and Road Initiative, President Conte hopes to reverse Italy’s ill-fortune through closer ties to Beijing, while China views Italy’s present woes as an excellent way to expand the initiative. Whether the deal will be beneficial to Italy at this stage remains to be seen, especially as Italy exports less than France or Germany to China, in addition to having a 17.6 million euro debt owed to China. This imbalance between the countries will need to be examined if the deal between them is to be successful. In addition, Italy should remain vigilant to ensure it does not fall into a greater debt burden through an agreement that could further disadvantage it in future negotiations.