The AIIB and the EU: legal opportunities and risks

Abstract:

Forming an integral part of China’s grand vision “One Belt One Road” (OBOR or “Belt and Road Initiative”), the Asian Infrastructure Investment Bank (AIIB) launched operations at the start of 2016 with its headquarters located in Beijing. Notwithstanding the bank’s Chinese origin and regional focus, many European countries – including fourteen EU Member States (Austria, Denmark, Finland, France, Germany, Italy, Luxembourg, Malta, Netherlands, Poland, Portugal, Spain, Sweden, United Kingdom) – promptly decided to join as prospective founding members. With the subsequent admission of Belgium, Hungary, Ireland, Cyprus, Greece and Romania as prospective members, the number of participating EU Member States has further increased to twenty. As a result, the AIIB must be regarded as a novel financial institution with global significance, in line with multilateral development banks (MDBs) such as the World Bank or the Asian Development Bank.

In the light of such unprecedented developments, this article analyzes major implications resulting from AIIB membership, notably in view of new opportunities but also possible risks for EU Member States and the European Union (EU) as a whole. In particular, the following study assesses the EU’s legal position and influence in the AIIB, explores the EU’s economic interests and anticipated benefits and, last but not least, evaluates the impacts of financial cooperation and integration in the long term. Based on an overall summary, the author concludes with recommendations and suggestions for achieving more sustainable, balanced and fruitful relations on the Eurasian continent.

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