European Nations Pressed To Surrender IMF Board Seats.
World News - "European countries must give up seats on the board of the International Monetary Fund (IMF) if the institution is to remain credible, the Brazilian representative at the IMF has warned.... Paulo Nogueira Batista says that correcting the over-representation of Europe is the natural way to make the body more representative of the global economy....
Debate on IMF reform has been forced by a procedural maneuver undertaken by the US last month, in which it declined to re-elect the 24-member board in its current form. The move compels countries to reorganize the board before November 1, after which point, IMF officials say, the institution will lose credibility....
European directors now occupy nine of the 24 seats. Voting weights and seats still reflect the relative size of economies when the IMF was created in 1945, and emerging markets are calling for Europe to give up some of its seats...." [Financial Times]
The Washington Post adds that "...the dispute has raised some related questions about the future management of both the IMF and the World Bank.
European officials have argued that if they give up executive-director seats, the US should relinquish the effective veto it has over some IMF decisions and set aside the long-standing agreement under which the managing director of the IMF is chosen from Europe and the president of the World Bank is an American. In a more multilateral world, they argue, the jobs should be open to anyone, something the US, as the top donor to both organizations, has not yet accepted....
Executive directors would not speak publicly about the issue, but several from Europe argued privately that the US was disrupting a system that has worked reasonably well....Directors argue that the existing system allowed the IMF to absorb dozens of new members in the early 1990s and accommodate a host of regional and political sensitivities...." [The Washington Post]