France and Germany to join UK on Chinese-led investment bank

Three more EU countries have confirmed their intention to join the Chinese-led Asia Infrastructure Investment Bank (AIIB) in a snub to the United States.

French and German government officials confirmed their plans to apply for membership of the bank on Tuesday (17 March). Italy has indicated that it will also join.

The bank, which currently has $100 billion (€95 billion) of registered capital but is likely to see its coffers boosted by its new potential members, was launched by Chinese President Xi Jinping last autumn, backed by 21 countries including China, India and Singapore.

The news means that the EU’s four largest member states will all be members of the bank, after the UK became the first European country to break ranks and state its intention to become a founder member of the AIIB last week.

It is also a snub to the United States, which has expressed reservations about the bank’s standards on governance and social and environmental safeguards, although analysts believe that Washington’s misgivings are more to do with fears that the AIIB could challenge the Western-dominated World Bank in the region.

"We want to contribute our long-standing experience with international financial institutions to the creation of the new bank by setting high standards and helping the bank to get a high international reputation,” said German Finance Minister Wolfgang Schaeuble i in a statement on Tuesday.

The AIIB will provide finance for infrastructure projects across Asia, in a bid to boost investment in transport, energy, telecommunication, agriculture and urban development infrastructure.

Speaking with reporters on Tuesday, Commission spokesperson Mina Andreeva welcomed the move and denied that the AIIB’s success would detract from the Commission’s own €315 billion infrastructure investment programme which is set to begin distributing funds in the summer.

“Underinvestment in infrastructure is a global challenge,” she said, adding that “in Asia, as in Europe, there are extensive needs for investment ….. increased investment in Asia’s infrastructure is highly welcome and is also a business opportunity for EU companies.”

The EU has opened talks with the Chinese government about a possible trade and investment pact between the two blocs. Their government’s membership of the AIIB should make it easier for European firms to operate in China.