Germany will buy a stake in the
China-led Asian Infrastructure Investment Bank that will make it the
fourth largest shareholder, the German cabinet has confirmed.
The country's capital investment will likely amount to some $900 million, according to a draft proposal.
As Deutsche Welle reports, Germany will acquire a 4.1-percent stake in the Asian Infrastructure
and Investment Bank (AIIB), which would make it the fourth largest
stakeholder after China, India and Russia.
A draft proposal still has to pass through both houses of parliament, while the German government approved it today.
The AIIB would have a capital base of $100
billion (88.6 billion euros), according to the documents.
According to the plan, Germany's capital investment will constitute around $900 million and will be contributed between 2016 and 2019, and a further $3.6 billion will be involved in financial guarantees.
The AIIB is designed to raise more resources for infrastructure projects
across Asia, with support also coming from 13 other European nations,
including fellow G7 countries France, Britain and Italy.
Its founding charter is scheduled to be signed on June 29 in Beijing.
The US, Japan and Canada have been skeptical of the bank, claiming that China could use its leading role in order to pursue its geopolitical interests.
The US remained concerned about the AIIB’s standards with Jack Lew, US Treasury secretary, previously acknowledging that there was enough infrastructure need for new and existing institutions. He also added that the US would be willing to work with the AIIB through existing financial institutions such as the ADB and the World Bank.
Earlier, the Wall Street Journal reported that China would ultimately have veto power over major decisions of the AIIB after providing almost a third of the lender's overall capital base, giving Beijing an estimated 25 to 30 percent of total votes.
AIIB and its rivals:
Asian Infrastructure Investment Bank
Subscribed capital: $50bn initially, rising to $100bn
Member states: 47 so far
Voting power: By GDP
New Development Bank (“Brics Bank”)
Subscribed capital: $50bn initially
Voting power: Equal shares
Asian Development Bank
Subscribed capital: $165bn
Member states: 67
Voting power: Dominated by Japan (15.7%) and US (15.6%); China has 5.5%
Subscribed capital: $223bn
Voting power: Dominated by US (16%), followed by Japan (8.9%) and China (5.8%)