EBRD sends China membership plan to governments for approval

Chakrabarti speaks during an interview in Kiev
European Bank for Reconstruction and Development (EBRD) President Suma Chakrabarti speaks during an interview in Kiev, Ukraine, July 2, 2015. REUTERS/Valentyn Ogirenko

November 11, 2015

By Marc Jones

LONDON (Reuters) – The European Bank for Reconstruction and Development’s management backed China’s bid on Wednesday to become a member of the bank, paving the way for what is expected to be final approval by shareholder governments next month.

The EBRD confirmed its president and other top officials gave the green light for the report on China’s membership to be sent to the bank’s board of governors which are mostly the finance ministers of the 64 countries with stakes in the bank.

If, as expected, they approve the proposal it would give Beijing a token but symbolic 0.1 percent stake in the EBRD and a new way of extending its global influence after its recent steps to boost trade links with Europe and Asia.

China will be paying into the development bank rather than receiving investment from it. But work the EBRD is already planning in countries like Kazakhstan overlaps with China’s so-called “One Belt, One Road” initiative.

EBRD President Suma Chakrabarti has said the bank would like to do joint work with the new China-led Asian Infrastructure Investment Bank (AIIB).

Set up in 1991 to invest in the former Soviet bloc countries of eastern Europe, the EBRD has been gradually spreading its reach in recent years.

It also now invests in Mongolia, Turkey and the economies affected directly or indirectly by the Arab Spring such as Morocco, Egypt, Tunisia and Jordan. Most recently it has also added euro zone crisis countries Greece and Cyprus.

(Reporting by Marc Jones; Editing by Andrew Hay)