Lawmakers urge Geithner to retain U.S. voting rights at IMF
Thursday, September 30, 2010; 8:09 PM
Senate leaders are pushing the Obama administration to hold on to U.S. voting rights at the International Monetary Fund amid an overhaul of the fund that is aimed at better reflecting the importance of emerging market nations.
The United States in particular is pushing to replace some of the western European members of the IMF's governing board with representatives from emerging economic powers such as Turkey or Poland.
The overhaul is a sensitive subject, challenging the traditional hold that small European nations such as Belgium have had on IMF executive board seats.
In a letter to Treasury Secretary Timothy F. Geithner, the Senate Foreign Relations Committee backed the goal of reshuffling the board, but urged him not to barter away any U.S. authority. European officials have argued that if they are asked to give up seats on the fund's executive body the sacrifice should be mutual - with the United States either shifting some of its voting power to developing nations, or giving up the veto it currently holds over some board decisions.
But "we strongly oppose any further dilution of our voting rights, quota and voice," Committee Chairman John F. Kerry (D-Mass.) and ranking Republican Richard Lugar (Ind.) wrote to Geithner. The letter cautioned that any agreement the United States makes on the issue would require congressional approval.
Along with reshuffling seats on the fund's executive board, IMF members are debating how to shift 5 percent of the fund's voting power from developed countries to less developed ones. As with the board representation, the senators urged that the 5 percent come from western European nations whose economies have become less significant in comparison with the rising Asian and Latin American powers.
European officials in Belgium on Thursday said they were working on a plan that would allow different representation on the IMF executive board, and expected to release it Friday.