The EU is willing to share its seats on the International Monetary Fund’s (IMF) executive board in return for making it harder to force reform in the future.
The EU plan would reorganize the 24 constituencies of countries, each of which is represented by a director, to create two more groupings in which emerging market countries (store udviklingslande, red.) had the right to hold the chair on a revolving basis.
The nine-point plan, presented by Belgium and Germany to EU finance ministers at a summit meeting in Brussels, has not been formally adopted, according to one EU official. But, the official said, “it is the basis of a deal” that is likely to be approved soon.
The reform of the board seats would be linked to a quota shift of at least 5 percent to “dynamic emerging economies and developing countries”, EU finance ministers said. “The 2010 quota review will be completed in a fair way, so that all over-represented countries contribute to the increase for under-represented countries”, they stated.
EU ministers also agreed that any members of a constituency whose voting quota is at least half that of the largest member in the constituency would have an opportunity to hold the position of the executive director on a rotating basis.
The EU offered, too, Friday to give up its informal right to nominate the head of the IMF, in return for the US renouncing its own parallel rights over the World Bank and agreeing to an IMF quota reform.
Belgian Finance Minister Didier Reynders indicated that the US’ position as being the sole IMF member with veto rights should be revised, and asked for the size of the IMF board to be permanently set at 24.
Nevertheless, the EU’s offer to give up two seats on the IMF’s board is unlikely to gain approval at the annual IMF meeting, but could prove to be a template for a temporary compromise.
Besides dropping some of the controversial provisions in the EU’s offer, an accord would likely see modest temporary board reform – perhaps two seats on a rotating basis – based on a promise of substantial restructuring within two years.
Kilde: www.worldbank.org
