The IMF’s Thorny Transatlantic Feud

by Kati Suominen
Wednesday, 9 September 2010

WASHINGTON — In a move likely to please China, India, and Brazil, but force a confrontation with Europe, the Obama administration last month blocked plans that would maintain the current size of the board of directors of the International Monetary Fund (IMF). This is the strongest U.S. effort yet to boost emerging markets’ influence in the world financial body. Washington wants a 20-member board, down from the 24, with Europeans, currently holding nine chairs, incurring the cut. Europeans balk at the idea. The standoff will have to resolved by October 31, when the mandate of the existing board expires, and the institution will become rudderless.

The American demands are nothing new. The George W. Bush administration called for shrinking the Fund board by halving the number of European chairs. Germany, France, and Britain have long had their own, non-rotating seats on the board, while Belgium, the Netherlands, Spain, Italy, Denmark, and Switzerland represent groups of countries.

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