Europe's $23 Trillion Plan to Cut China Ties Hits Funding Roadblock

A recent study by EY-Parthenon estimates that the US and European countries will spend $23.6 trillion by 2050 to reduce their dependence on China in critical sectors, with an annual investment of around $940 billion.

The breakdown of this figure shows that 58% comes from the US ($13.7 trillion over 25 years or $550 billion per year), 39% from the eurozone ($9.1 trillion or $360 billion per year), and a modest 3% from the UK ($800 billion or $32 billion per year).

The study focuses on the eurozone, as it is the core of the EU economy, accounting for approximately 85% of GDP. However, the situation is fundamentally different in the eurozone, where European countries have struggled to agree on which countries, projects, and financing methods to use.

The analysts suggest that Brussels intends to get the necessary funds through four scenarios: expanding the EU's 'own resources' by introducing pan-European taxes; direct contributions from member states; increasing the EU budget; or transferring costs to businesses.