Germany, France, Italy to Join Chinese-Led Asian Bank

Germany, France and Italy followed Britain on Tuesday in announcing that they plan to join a proposed Chinese-led Asian regional bank, swinging Europe’s biggest economic powers behind a project that is viewed with concern in Washington.

Britain last week became the first major Western country to seek membership in the Asian Infrastructure Investment Bank. Tuesday’s announcement brings three more members of the Group of Seven industrial powers on board.

China proposed the bank in 2013 to finance construction of roads and other infrastructure. It has pledged to put up most of its initial $50 billion in capital. Twenty-one other governments, including India, New Zealand and Thailand, have said they want to join, but the U.S. and close allies Japan, South Korea and Australia have not.

The United States has expressed concern the new bank will allow looser lending standards for the environment, labor rights and financial transparency, undercutting the World Bank and International Monetary Fund. The Europeans appeared at pains to counter those concerns.

A German Finance Ministry statement announcing the three European countries’ plan to join the AIIB said that, working in partnership with existing development banks, it “could play an important role to provide funds for addressing the large infrastructure needs in Asia.”

“France, Italy and Germany, in close coordination with international and European partners, are keen to work with the AIIB founding members to establish an institution that follows the best standards and practices in terms of governance, safeguards, debt and procurement policies,” it added.

In Beijing, Chinese Foreign Ministry spokesman Hong Lei said the AIIB is an “open and inclusive” organization and China welcomes the countries willing to be its founding members.

“China will work together with all parties to forge a professional and highly efficient infrastructure investment platform that will be beneficial and reciprocal to all parties so as to contribute to regional infrastructure construction and economic growth,” Hong said.

The bank is one of a series of initiatives by Beijing to increase its influence in global finance and expand trade links.

This article appeared in print in the March 18th, 2015 edition of Hamodia.