France, Germany and Italy said on Tuesday that they would become founding members of the Asian Infrastructure Investment Bank (AIIB), a proposed development bank spearheaded by China, despite U.S. discouragement from doing so. This comes after Britain became the first European nation that applied to join the bank on Thursday, a move that evoked caution from the U.S. that the AIIB may not meet the same high standards as the World Bank and other Asia-focused development banks.
The initiative gained international attention in October after China and 20 other countries from the Middle East and Asia-Pacific regions signed a Memorandum of Understanding to launch the bank. China will have up to 50 percent stake in the bank, making it the largest shareholder. Funds from the bank will be use to finance infrastructure and telecommunications projects in developing countries across Asia.
The U.S. has protested the bank, arguing that it would go against the environmental, procurement and human rights protocol that Washington-backed institutions such as the World Bank and the Asian Development Bank are required to follow.
However, Chinese President Xi Jinping has stated that the initiative will only help the global financial system by promoting multilateral governance.
Although U.S. allies South Korea and Australia initially opposed the bank, both countries are now considering joining before the March 31st deadline.
Jim Yong Kim, the president of the World Bank, has welcomed the AIIB and insists that it’s standards would meet those of existing development banks.
The new members will add to the AIIB’s growing list founding nations, which now totals 30. The bank is expected to be established by the end of this year.