Saturday, August 28, 2010

IMF Politicking

On IMF governance, another area of disagreement between the United States and Europe, the draft gives no indication that the EU is willing to give up seats on the IMF's executive board in order to give greater voice to fast-growing emerging economies such as China.

The draft showed the EU supports shifting slightly more than 5 percent of IMF quota shares to "underrepresented" emerging and developing economies, but wants to keep the size of the executive board unchanged.(1)

It will be darkly humorous to watch US aligned mouthpieces bash the EU on IMF over-representation; the US is the only country that has veto power over major decisions. With the IMF already unofficially expelled from East Asia, a breakdown in EU-Washington relations will further diminish its imagined mandate.

1'EU prods China for faster yuan rise: G20 draft' - Reuters

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