US delay deadlocks IMF reforms
Print Edition
REFORMS to the International Monetary Fund have hit a deadlock despite a declaration from global financial chiefs that they would move forward without the United States if it fails to ratify the changes by year-end, a G20 official said yesterday.
The inability to proceed with giving emerging markets a more powerful voice at the IMF and shoring up the lender’s resources appeared the most contentious issue for officials from the Group of 20 leading economies and the representatives for all IMF member nations who met over the weekend.
In a final communique, G20 finance ministers and central bankers said they were “deeply disappointed” with the delay.
“Some said that we need to give the US more space,” the official, who participated in the G20 talks and spoke on conditions of anonymity, said. “I say we are at a dead end.”
Any attempt to break the package of reforms, proposed by the G20 in 2010, would be disastrous not only for the US, but for the whole group, he said, because most countries have already gone through the ratification procedures.
“If you pull the 2010 package apart, you will have to start anew,” the official said. “And this factor cannot be overcome. How to overcome it? Nobody wants to go again through this process for the second time.”
Other officials were not immediately available for comment.
Emerging markets, most handicapped by the lack of reforms, expressed exasperation over the weekend that a four-year wait for the reforms is asking too much of them. But it is unclear what moves could overcome the impasse.
There could be some ad hoc measures taken to achieve at least some of the governance overhaul for the global lender without formal US approval. Russian Finance Minister Anton Siluanov said developing nations may demand changes to the IMF's emergency borrowing mechanism if the US does not approve the overhaul.
Most of the solutions, giving the structure of decision making at the IMF, could not be done without the US approval.
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