EU has much to learn from China-Global South ties

Despite the ongoing trade conflict between China and the United States, the possibility of trade and business cooperation between the European Union and China has not increased as expected. This is because the shift toward greater strategic autonomy for the EU is marked by a complexity of factors, many of them unseen and, even, poorly understood.

It is clearly the case that European markets are becoming more dependent on good bilateral trade relations with China. Because of the White House's policy of imposing punitive tariffs on its trade partners, the EU and China could witness increased trade in the near future, at least, and very possibly in the longer term as well. Yet the unseen and unappreciated reality of the highly speculative financial bubble underlying the growing instability of the EU and US economies is a crucial factor that must be recognized. This problem, which failed to be properly addressed during the global financial crisis in 2008, has only increased in unpayable speculative debt. EU central banks are also caught up in this spiral of speculative debt.

Their solutions of simply raising and lowering interest rates to fight inflation will not work, not in the short term nor the long term. Instead, there is a need to return to the policies of Glass-Steagall established under former US president Franklin Roosevelt to legally distinguish the lines between commercial banking and investment banking. There is no other reasonable or competent policy to eliminate this massive speculative debt in the system.