Almunia plots voice for euro

By Anna McLauchlin

Date: 20/04/06

Weak representation of the eurozone in international fora has once again become the topic of discussion at the European Commission ahead of meetings of the International Monetary Fund (IMF) and the G7 this weekend (21-23 April).

Last week (12 April), Economic and Monetary Affairs Commissioner Joaqu’n Almunia expressed concern that the eurozone is not represented with one voice at such meetings, particularly when exchange rates are discussed, and was invited by Commission President José Manuel Barroso to come forward with proposals on the matter.

The Commission is keen to get more formal representation for both the economic commissioner and the head of the informal Eurogroup, which comprises ministers of countries which have adopted the single currency, to represent the eurozone in international gatherings.

But well-placed sources at the Commission said that if any steps were to be taken they would likely be small ones - as there was little support from the larger member states for radical change.

External representation of the eurozone has been of concern to the Commission since the creation of the euro. The Commission has observer status at the IMF but it has no formal seat at G7 or G8 meetings and invitation is extended on an irregular basis.

A proposal to give the eurozone a more formal position was killed off in 1998, as it would have required France, Germany or Italy to give up their seats.

In May last year, a Commission working group presented a paper to finance ministers which claimed that "the EU euro-area does not play a role in the international economic, financial and monetary sphere commensurate to its economic weight".

No formal decision was ever taken on the paper, although member states have agreed to allow a Commission official to join one of the IMF and World Bank constituency groups composed of the smaller EU member states.

Finance ministers and central bank governors from the G7 nations - the US, the UK, France, Germany, Italy, Canada and Japan - will meet in Washington tomorrow (21 April) ahead of the IMF and World Bank spring meeting on Saturday. Rising oil prices and global interest rates are likely to be high on the agenda, as well as reform at the IMF.

Luxembourg Prime Minister and eurogroup chief Jean-Claude Juncker has been invited to attend the G7 meeting in full, while Almunia is invited only to some of the proceedings.

Economic and Monetary Affairs Commissioner Joaquín Almunia on 12 April 2006 expressed concern that the eurozone was not represented with one voice at meetings of international financial fora such as the IMF, the World Bank and G7/G8, particularly when exchange rates were discussed. He invited by European Commission President José Manuel Barroso to come forward with proposals on the matter.