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Why Europe dismisses U.S. concerns and to join AIIB

2015-03-19 08:44 Xinhua Web Editor: Gu Liping

The euro zone's biggest economies -- Italy, France and Germany -- have Britain in dismissing U.S. concerns and will become founding members of the Asian Infrastructure Investment Bank (AIIB).

Experts say the development is a diplomatic and financial success for China, which is behind the new financial institution, and shows how Europe is prepared to look east for trade deals.

The news comes amid increased pressure on the United States to relinquish its domination of the International Monetary Fund (IMF), and coincides with Chinese and European concerns over America's dominance of trade in the Pacific.

European Commission spokesperson Mina Andreeva welcomed the new European cooperation with Beijing.

"Under-investment 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."

Her declaration came after U.S. Secretary Treasury Jack Lew had urged caution over AIIB membership. "Whoever joins the new AIIB should first make sure it adheres to rigid standards," he said. "They must protect workers and the environment. There must be no corruption."

But a joint statement by the foreign and finance ministers of Germany, France and Italy said they would work to ensure the AIIB "follows the best standards and practices in terms of governance, safeguards, debt and procurement policies."

A spokesman for the Chinese Foreign Ministry said the new bank would be "open, inclusive, transparent and responsible."

The AIIB was launched in Beijing last year to spur investment in Asian transport, energy, telecommunications.

China said earlier this year a total of 26 countries had been included as AIIB founding members, mostly from Asia and the Middle East. The participation of the four biggest European economies is particularly significant.

European finance pundits have welcomed the news. Professor Stefano Gatti, a banking expert at Milan's Bocconi Business School, told Xinhua that China's status as an emerging economic power was behind European willingness to participate in the venture.

"I think this new joint venture is simply about European countries wanting to invest in a huge emerging economy," he said. "I don't see anything suspicious or shady, or any political interference."

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