INTERVIEW-Europe may resist IMF votes reform -Strauss-Kahn

Tue Feb 26, 2008 12:01pm GMT
 
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By Daniel Flynn

OUAGADOUGOU, Feb 26 (Reuters) - European nations may resist reforms to the voting system of the International Monetary Fund which would hand greater influence to emerging economies like China, the head of the IMF said.

Dominique Strauss-Kahn, in Burkina Faso on the first leg of a three-nation Africa tour, said he was unsure if a deal could be reached at an April meeting of global finance chiefs after hopes for an agreement in October collapsed at the last minute.

"To have an increase in the quotas of emerging countries -- China, India, Brazil -- is very difficult because the sum has to add up to 100 percent, so some others must lose," Strauss-Kahn told Reuters in an interview late on Monday.

"The ones who are going to lose are mainly the European countries and that is the reason why they may be reluctant."

Asked if a compromise could be reached among the Fund's 185 members, he said: "I hope so, I just don't know. It's a process which has been going on for two years now."

"Nobody will be totally happy but we have to find a solution. Maybe we will do it."

Voting rights are determined by the size of a country's economy, current account transactions and official reserves, but emerging nations want purchasing power parity to play a bigger role as it favours fast-growing economies. The United States backs the quota reform but wants to keep its own veto.

Strauss-Kahn met on Monday with heads of state from the Economic and Monetary Union of West Africa (UEMOA), who called for poor nations to also have a greater voice at the IMF.  Continued...

 

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