Almunia calls for joint EU representation at the IMF

The European Commission today (6 April) renewed calls for eurozone countries to accept joint representation at the International Monetary Fund (IMF). Criticising countries for “jealously” guarding their national seats on the IMF's board, Joaquín Almunia, the European commissioner for economic and monetary affairs, said change would be forced upon eurozone states unless they showed flexibility.

Eurozone members France, Germany, Belgium, the Netherlands, Spain, and Italy all currently have separate representatives on the IMF's 24-member executive board, which is responsible for the organisation's day-to-day management. All except France and Germany represent groups of EU and non-EU countries, and vote on their behalf.

In a speech on “European foreign economic policy”, Almunia said that the situation at the IMF was “becoming more and more untenable”. “It is now time to face up to the reality and to find a solution which would be acceptable to member states before a solution to the problem is forced upon us,” he said.

Almunia said the Commission had long called for a consolidation of European representation on the boards of international financial institutions and that the need for change had become more urgent because of commitments by the G20 group of countries to reform the institutions, including the IMF, to give greater representation to emerging and developing countries. The financial crisis was a “striking justification” for more co-ordination, he said.

A spokesperson for the German finance ministry said that Germany was “open for discussion” on the idea of a single seat at the IMF. She said, however, that it was not something which was likely to be dealt with in the short term.

Almunia hinted that he would like the Commission to have a greater role in international discussions on financial regulation. He said that despite being the initiator of financial regulations, the Commission will be “only an observer” in the new Financial Stability Board created by the G20. The board, established on 2 April, has been tasked with agreeing reforms to international regulation and supervision that will avoid a repeat of the crisis.