Simon Johnson, a former IMF chief economist, said that the passing of the EU’s Lisbon Treaty, should accelerate moves towards a common European position in international economic institutions. The Lisbon Treaty will take force next month, taking the EU another step closer towards acting as a single entity in international affairs. The treaty creates a European president and a new European “foreign minister”, who will be able to speak for all EU nations at some meetings of the United Nations. One of the contenders for the new European presidency, Jean Claude Juncker of Luxembourg, has also backed a single European seat on the IMF board. The Washington-based IMF works to ensure the stability of the world economy and acts as lender of last resort to governments that run out of money. It is funded by rich countries and largely run by the US and Europe. But as emerging economies like China pay more into the fund, there is growing pressure to reform the way IMF is governed. The UK is one of eight nations with a full seat on the board of the IMF. The others are the US, Japan, France, Germany, China, Russia and Saudi Arabia. The US government has privately lobbied for the reform of the IMF, including a reduction in the number of European seats on the board. Britain and France have strongly opposed any move that would mean they give up their seats. Prof Johnson, now a fellow at the Peterson Institute for International Economics in Washington, said that the treaty changes strengthened the case for a single EU seat on the IMF board. He said: “People say that the EU is not a country and only countries can have IMF seats, but that doesn’t really stand now that you’ve got Lisbon. The treaty makes the EU as much a single federal entity as some other IMF members.” A single EU seat "makes sense," he said. Prof Johnson said that IMF reform is currently stalled because of European opposition, “but it could move up the agenda quickly, depending on who becomes gets the presidency and foreign affairs jobs.” Mr Juncker, the prime minister of Luxembourg, is seeking the EU presidency. Earlier this year, he failed to persuade the countries using the Euro to take a single seat on the IMF board, but promised to return to the subject later this year. Joaquin Almunia, the European Commissioner for Economic and Monetary Affairs has also backed moves towards a single EU seat on the IMF. Mr Almunia said in July: "Everyone agrees for the long term this is the best solution but some think the long term is always very far away." There is also growing pressure for a move towards shared European representation at the top of the World Bank, which funds development to emerging economies. A World Bank report by Ernesto Zedillo, a former Mexican president, last month said that European nations are “considerably overrepresented” on the bank’s executive committees and should lose some of their seats.'Lisbon Treaty should mean single EU seat on IMF board'
Britain should give up its place on the International Monetary Fund to make way for a single European Union seat on the fund’s board, a leading economist has said.
Saturday, 7 November 2009
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