European Allies Defy U.S. In Joining China-Led Development Bank
NPR - Mar 17, 2015
Four key European allies have broken ranks with the U.S. to join a major new development bank created by China. Germany, France, and Italy today agreed to join the Asian Infrastructure Investment Bank. Last week, the U.K., one of America's staunchest allies, became the first Western nation to join the new bank.
The Obama administration opposes the AIIB, due to open later this year, and has pressured allies such as South Korea, Japan and Australia not to join the new bank. The administration says there's no need for another international lending institution.
But Fred Bergsten, a senior fellow with the Peterson Institute for International Economics, says there's a huge demand for infrastructural investment in much of Asia.
"The lack of infrastructure - roads, airports, ports, power facilities - are among biggest barriers to development throughout Asia," he says.
Bergsten says roughly $8 trillion dollars of infrastructure investment will be needed over the next decade, and that the AIIB will help fill that gap. It's believed China is prepared to put up half of the initial $100 billion budget, probably giving it veto power, much the same as the U.S. has with the World Bank and the International Monetary Fund.
