Strasbourg, 20/02/2006 (Agence Europe) - On Thursday, the European Parliament decided to postpone until next month the vote on the report by French Socialist MEP Benoît Hamon on the current 'strategic review' of the International Monetary Fund (IMF). The debate revealed that the report is widely welcomed. It was unanimously endorsed by the European Parliament's Economic and Monetary Affairs Committee in January (see EUROPE 9125 and 9081). Other international institutions (WTO, WHO, UNEP and UNCTAD) have started taking an interest in the changing role of the Bretton Woods institution (the IMF), but Hamon regrets that the IMF has not been subject to the necessary governance reforms. He calls for a rehash of the voting system at the IMF. Weight in the decision-making process does not currently match the demographic weight of developing countries and a more legitimate representation is required, he argues, pointing out that although a quarter of the IMF members come from Africa, it only has 4% of the vote, whereas with its 17.11% of the vote, the United States has the power to veto the most important decisions.
During the debate, the EU Economic and Monetary Affairs Commissioner, Joaquin Almunia, welcomed the report as being particularly relevant against the backdrop of globalisation and the impact on the IMF's mission. He said the European Commission agreed with the rapporteur's views on vote weighting at the IMF, but would have preferred clearer and more direct wording on the issue of a single seat for the European Union despite this probably not being possible in the short term. Almunia argued that before the 'inevitable and desirable' single European seat, a coordinated position should at least be reached among Member States. While the report hints at the idea, the wording merely refers to the intermediate stage of better coordination of Member States' views (particularly Member States in the eurozone) in the from of a shareholders' pact. Hamon feels that a step-by-step, stagiest, approach is required to finally get close to united representation and a single seat for the euro, arguing that coordination would have the merit of allowing the EU to have a blocking minority and would end the deadlock over vote weighting. He explained that European power only exists on paper, because Europe's 31.92% vote is divided among several 'constituencies'.
IMF Adjustment Policies are not always successful (Argentina is the prime example here), pointed out Hamon, regretting their inability to avoid spreading crisis and the huge contradiction between some of the IMF's recommendations and the recommendations of international agreements, under the ILO, for example. Jean-Louis Bourlanges (ALDE, France), shadow rapporteur for the European Parliament's International Trade Committee, said his own opinion generally converged with that of Benoit Hamon's because better coordination of all development policies was required. But Bourlanges argued that the IMF, although one of a group of organisations, had a kind of pre-eminence in practice over other international organisations and a re-tuning of powers was required without going too far in the direction of demography. British Conservative John Purvis said the IMF should ease its over-rigid loan criteria but should keep the option of imposing criteria. Dutch Socialist Ieke van den Burg wanted the IMF to focus more on social aspects and learn lessons from other institutions, like the European Investment Bank, about dialogue with non-governmental organisations. Diamanto Manolakou (GUE/NGL, Greece) said the IMF was a tool for promoting capitalists' interests and used blackmail to impose its views. She added that reforming the IMF was not about getting it to take a more aggressive line, which would lead to greater exploitation of workers at the international level. Nigel Farage (IND-DEM, UK) simply regretted that his country's voice was not heard at the EU and warned that a single European seat at the IMF would be a further muzzle. Other MEPs were more constructive, regretting the IMF was not part of the United Nations and calling for the selection of IMF President to no longer be the preserve of rich countries alone.