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Montevideo, September 24th 2018 - 00:02 UTC

EU main economies announce plans to join China-led development bank, despite US warning

Wednesday, March 18th 2015 - 08:20 UTC
Full article 10 comments
German Finance Minister Wolfgang Schaeuble said his country along with Italy and France “want to bring our long experience... to help the bank build a solid reputation”. German Finance Minister Wolfgang Schaeuble said his country along with Italy and France “want to bring our long experience... to help the bank build a solid reputation”.
The 50bn dollars AIIB has been sponsored by Beijing as a way of financing regional development, but it is seen as a potential rival to US-based institutions such as World Bank. The 50bn dollars AIIB has been sponsored by Beijing as a way of financing regional development, but it is seen as a potential rival to US-based institutions such as World Bank.

France, Germany and Italy on Tuesday announced plans to join the Chinese-led development bank AIIB, drawing concern in Washington which views the institution with skepticism. The three European countries want ”to become founding members of the Asian Infrastructure Investment Bank (AIIB)”, they said in a statement.

 The 50 billion dollars AIIB has been feted by Beijing as a way of financing regional development, but it is seen as a potential rival to US-based institutions such as the World Bank.

Washington, Tokyo and Seoul have declined to become founding members -- but within a week, Europe's four biggest economies have signaled plans to join. Britain on Thursday announced its ambitions to be the first Western country to join the bank, in a move to bolster relations with China.

Responding to reports of European interest in the bank, Chinese foreign ministry spokesman Hong Lei said: “We welcome countries to join the AIIB as prospective founding members.”

“The AIIB is an open and inclusive multilateral investment institution,” the spokesman said, adding that “participation by countries outside the region will intensify the extensive representativeness of the AIIB.”

China and 20 other countries signed a memorandum of understanding to establish the Beijing-headquartered bank in October.

At a joint press conference with Chinese Vice-Premier Ma Kai on Tuesday in Berlin, German Finance Minister Wolfgang Schaeuble said his country along with Italy and France “want to bring our long experience... to help the bank build a solid reputation”.

“We want to make a contribution to the positive development of the Asian economy, in which German companies are actively taking part,” he said.

But Europe's move was met with a warning of caution from the United States.

Treasury Secretary Jacob Lew said Washington's main concern was whether the bank would “adhere to the kind of high standards that the international financial institutions have developed”.

“Will it protect the rights of workers, the environment and will it deal with corruption issues appropriately?

”Our point all along has been that anyone joining needs to ask those questions at the outset and I hope before the final commitments are made anyone who lends their name to this organization will make sure that the governance is appropriate,“ Lew told Congress.

Europeans believe that by being inside the AIIB they will be better able to ensure governance standards are high.

”Germany also wants that the AIIB attains the high standards of the World Bank and other regional financial institutions,“ a source close to the German government revealed. ”We are acting on the principle that we can do that best with constructive cooperation in the elaboration of these standards”.

Categories: Economy, Politics, International.

Top Comments

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  • Condorito

    Just like I said on the previous article “the right long term strategy for a European nation”

    http://en.mercopress.com/2015/03/16/uk-caught-on-the-wrong-side-in-a-us-beijing-dispute-over-chinese-development-bank#comments

    Mar 18th, 2015 - 10:07 am 0
  • Bisley

    There should be no such thing as a “development bank”, including the IMF and World Bank. These institutions are nothing but a tool of cronyism and corruption (at public expense) by the governments involved; they don't “develop” anything, except profit and political support for their favorites.

    Mar 18th, 2015 - 01:12 pm 0
  • Outlawcatcher

    @3...I agree. These are nothing but profiteering organisations for their banker owners. Apart from that the US does not want EU countries to financially connect with the Chinese as it will provide a competitor to the IMF and World Bank, which are US led. It is like democracy, anything that challenges the US viewpoint will get a battering. The fact that they imply that the Chinese will not adhere to 'high standards' is also laughable. The IMF and World Banks are not the gold standard in banking by a long way and they have been used to subjugate a lot of developing countries to poverty with their Structural Adjustment Programmes (SAP's). Love the US but your viewpoint of democracy is tainted with heavy handed financial imperialism...as is ours in the UK.

    Mar 18th, 2015 - 01:44 pm 0
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