The US should give up its veto over important decisions in the International Monetary Fund in return for Europe accepting a smaller say, Germany has proposed.
The suggestion, which experts say will be strongly opposed by the US, addresses a politically highly symbolic dispute about voting power and seats on the fund’s executive board. Shifting power towards emerging market countries is one of the central elements in the Group of 20 nations’ drive to make the fund and other international institutions more representative.
Last month the US used a procedural manoeuvre to force the European countries to agree reforms to the executive board by November 1. The 24-member board currently has nine European executive directors, and negotiations have been under way to increase representation from emerging markets, particularly in Asia. Since the UK, France and Germany have seats by right, this would almost certainly mean smaller European countries such as the Nordic nations, the Netherlands and Belgium giving up seats.