EU representation and the governance of the International Monetary Fund

Abstract:

The introduction of the euro and closer coordination of economic policies in the European Union are fuelling a debate on Europe's representation in the international financial institutions. A single EU representation at the International Monetary Fund (IMF) would affect the balance of power in the institution through a fundamental reallocation of quotas and executive directors among its membership. A reduction in the number of European executive directors, and in the total voting power of Europe and in its contribution to the Fund's general resources, could go hand in hand with an increase in the Union's impact on IMF decision-making. Such a change would also weaken the cooperative nature of the Fund through a reduction in the number and impact of mixed constituencies.