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Global governance

66 - Relations with Asian partners in multilateral institutions

Grade: C+
Unity 1/5
Resources 2/5
Strategy 2/5
Impact 4/5
Total 9/20

Europe was deeply fragmented in the rush to join China’s new infrastructure bank, but had a positive influence on the body

In 2015, China created a new multilateral financing institution, the AIIB, to address the infrastructure investment gap in Asia. Despite attempts by the Commission’s economics and finance department (DG ECFIN), the Council, and some member states (notably Germany) to organise an EU-level discussion on the AIIB and coordinate a common course of action, national decisions to join the bank were highly fragmented. Due to the difficult and lengthy process of organising a coherent EU response to the AIIB, the UK, France, Germany, and Italy began a dialogue among themselves. But the UK broke ranks, unilaterally declaring its intention to join the bank. France, Germany, and Italy responded by issuing a joint statement soon after London’s, and became founding members.

Other EU member states decided to join the AIIB independently, and often out of national interest rather than the interests of the Union as a whole. In total, 14 EU member states joined the new bank as founding members. Consultation was minimal at the EU level. But while members failed to make a united accession decision, which would have been of great symbolic significance, they did follow Brussels’s lead after accession, agreeing to speak with one voice about the significance of the AIIB, and about the EU’s role in the bank’s establishment and operations.

Overall, while the process was highly fragmented, the EU’s involvement in the AIIB should not be considered as a complete policy failure, as it transformed the AIIB into a truly multilateral institution – in a significant departure from the original plans – because of EU participation.