Thursday

24th Sep 2020

Commission proposes single euro seat in IMF

  • EU Commission vice-president Dombrovskis calls for a single euro seat at the IMF (Photo: European Commission)

The European Commission on Wednesday (21 October) proposed a single seat for the eurozone in the International monetary Fund (IMF) by 2025, in an effort to deepen the monetary union and give the currency bloc a unified voice in the global economy.

"If member states contradict each other, the Eurozone cannot gain the weight as its size of economies and share in IMF would suggest," Valdis Dombrovskis, Commission vice-president for the euro told press.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"It is to ensure that [the] euro area talks with one voice", he added.

As things stand, the 19 euro zone countries have 23 percent of shares in the IMF, but due to divisions between the countries, their influence often counts less. The United States has only 17.7 percent of shares, but since it speaks with one voice, it has more clout.

The 19 member states are also spread over different constituencies with the IMF, which have to reach a common position on issues, thereby further hindering a single unified euro voice.

The Commission's legislative proposal, which is the first in a series of proposals that will stem from a push to deepen the unity of the currency bloc following the euro debt crisis, calls for a single executive director at the IMF to represent the euro.

At the ministerial level, the Commission proposes that the president of the eurogroup, a gathering of the bloc’s finance ministers, which is currently held by Dutch Finance Minister Jeroen Dijsselbloem, should represent the euro area.

The proposal will have to be approved by member states.

The push for a single seat at the IMF comes after the debt crisis prompted efforts to revamp the structures behind the single currency.

Other measures unveiled on Wednesday include a proposal to governments to set "national competitiveness boards", which would track the performance of countries on indicators such as wages and productivity.

There is also a plan for a "European Fiscal Board" to advise governments, starting from next year, on the enforcement of the EU's rules on deficits and debt.

Another proposal due before the end of the year is to focus on completing Europe's banking union by moving towards a common deposit insurance system, a scheme Germany currently opposes.

These are among the first concrete proposals following a report presented earlier this summer by the "five presidents" - European Commission president Jean-Claude Juncker, together with the president of the Euro Summit, Donald Tusk, Eurogroup president, Jeroen Dijsselbloem, European Central Bank president, Mario Draghi, and European Parliament president, Martin Schulz - on how to strengthen the monetary union.

Doubts emerge on IMF participation in Greek bailout

The IMF has indicated it won't take part in a third bailout for Greece unless a deal is reached on debt relief. Meanwhile the Greek PM has a called a September party congress on the bailout.

European Monetary Fund proposal to be ready by June

The European Commission has re-affirmed its willingness to come forward with a proposal for a European Monetary Fund, opening a Pandora's Box of questions regarding its potential design.

EU countries stuck on rule of law-budget link

Divisions among EU governments remain between those who want to suspend EU funds if rule of law is not respected, and those who want to narrow down conditionality.

MEPs warn of 'significant gaps' in budget talks

The budget committee chair said the European Parliament expects tangible improvements to the package in its talks with member states - while the German minister argued that the EU leaders' deal was difficult enough.

News in Brief

  1. German foreign minister in coronavirus quarantine
  2. Report: Roma life expectancy '10 years lower'
  3. US corona death toll passes 200,000
  4. Greece and Turkey agree to resume talks in Istanbul
  5. Seven countries found MidEast energy forum, without Turkey
  6. Four more states join EU medical strategic stockpile
  7. Malta police arrest chief of staff of ex-PM
  8. EP pushing for effective rule-of-law mechanism

EU forecasts deeper recession, amid recovery funds row

The economies of France, Italy and Spain will contract more then 10-percent this year, according to the latest forecast by the EU executive, as it urges member state governments to strike a deal on the budget and recovery package.

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Council meets Belarusian opposition leader Svetlana Tichanovskaja
  2. Nordic Council of MinistersNordic Region to invest DKK 250 million in green digitalised business sector
  3. UNESDAReducing packaging waste – a huge opportunity for circularity
  4. Nordic Council of MinistersCOVID-19 halts the 72nd Session of the Nordic Council in Iceland
  5. Nordic Council of MinistersCivil society a key player in integration
  6. UNESDANext generation Europe should be green and circular

Latest News

  1. EU countries stuck on rule of law-budget link
  2. EU states struggle to better sync Covid-19 measures
  3. EP groups drop homophobe from Sakharov prize
  4. Legal complaint filed with EU Commission over migration
  5. Coronavirus: Will a second wave divide Europe again?
  6. Coronavirus: the Swedish model was worth emulating
  7. Time to fix Europe's broken migration and asylum system
  8. Covid-19: How is Eastern Europe bracing for a second wave?

Join EUobserver

Support quality EU news

Join us