This website is dedicated to the promotion of the vision of a ‘European Silk Road’. A project idea that was developed by The Vienna Institute for International Economic Studies (wiiw). A related study was authored by Mario Holzner (coordinator), Philipp Heimberger and Artem Kochnev. The authors would like to thank wiiw board member Dionys Lehner for providing the idea of the European Silk Road.
The study concludes that Europe should respond to China’s New Silk Road initiative with a coherent infrastructure network and transport strategy of its own to leverage its economic potential. It should not rely on China’s Belt and Road Initiative (BRI) to achieve this, but invest itself to ensure that it suits European priorities. Nevertheless, a ‘European Silk Road’ can be seen as complementary to China’s efforts. The study finds that the development of a European Silk Road could create 2-7 million new jobs and could increase GDP on average by 3.5% in Wider Europe over a ten-year period. Eastern Europe in particular needs an upgrading of its transport infrastructure. If this is achieved, the boost to incomes and living standards would be particularly significant in that part of the continent, as a ‘big push’ in transport infrastructure investment has the potential to industrialise broad sectors of the economy.
In a related wiiw Policy Note, a financing model for the European Silk Road is proposed. There, wiiw makes a proposal for the financing of infrastructure across the European continent with the help of a European Silk Road Trust (ESRT), backed by a European Sovereign Wealth Fund (ESWF). In the initial phase, the European Central Bank could reinvest a part of its assets in a way that would carry more risk, but also bring greater revenues, following the structure of the Norwegian oil fund. It is estimated that the ESWF would grow over the longer term to about 3% of the euro area’s GDP. This should be sufficient to guarantee the ESRT bonds – even if long-term interest rates move back into positive territory in the more distant future.