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EU must move to single voice in IMF-Almunia

Published 04/06/2009, 05:22 AM
Updated 04/06/2009, 05:24 AM

By Jan Strupczewski

BRUSSELS, April 6 (Reuters) - The European Union must consolidate its representation in the International Monetary Fund to be able to pull its weight in shaping global economic policy, the EU's top economic official said on Monday.

"I consider it crucial for the European Union to consolidate its voice in the global institutions, most importantly in the IMF," Economic and Monetary Affairs Commissioner Joaquin Almunia said in a speech.

"Too often the EU's voice on key issues at the global level is fractured and we fail to influence policy debates as effectively as we might," he said.

The 27-nation bloc is the world's biggest economic power, Almunia said, surpassing the United States in terms of population, gross domestic product and trade flows.

The euro, used in 16 EU countries, is the world's second most important currency.

"Despite our global currency and single monetary and exchange rate policy, the euro area has limited capacity to convey an assertive message on questions which directly impact our economy," he said.

Unless Europeans are united on key issues and act together, non-European interests in international institutions like the IMF will prevail, Almunia said.

"However, such a combined and effective response on most issues related to the IMF is difficult to achieve, as European representation at the IMF continues to be fragmented," he said.

"There are currently several European seats on the IMF board, and even the euro-area members have separate seats," he said, adding the case for a single euro-area chair was obvious.

"Yet, member states concerned jealously guard their seats," he said.

Also in the Group of Seven most industrialised countries, which comprises the United States, Japan, Canada and four European states -- France, Germany, Italy and Britain -- Europeans should stick together, Almunia said.

The same was true for the G8, which includes Russia and the G20 -- an even broader global forum now gaining in importance because it includes fast rising economic powers like China, India and Brazil, Almunia said.

"Europe must also do better at consolidating our voice within these groups on questions of macroeconomic policy, whereas at the present time, the representation of euro area countries remains fragmented and incomplete," Almunia said.

(Reporting by Jan Strupczewski, editing by Victoria Main)

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