Here again the negotiations are difficult

The annual meeting of the international monetary Fund (IMF) held today in Washington announcement of more tense. 184 Representatives of the Member countries will indeed are discussing the reform of the governance of the multilateral institution, to adapt to the challenges of the 21st century. The major emerging countries demanded, quite rightly, greater influence in the conduct of the policy of the Fund. The determination of the countries of Asia and America is legitimate, that they don't want to be victims of an institution dominated by the industrialized countries, which have so long imposed them their diktat. It is the international credibility of the IMF. The reform has two aspects. The first is the voting rights of each Member. The second is related to the composition of the Board of Directors.

On voting rights, the ongoing negotiations aim to transfer 5 of the votes of the wealthy countries to developing countries. A first transfer on approximately 3 of rights intervened in 2008 for the benefit of China, the Mexico, the Korea and the Turkey. In the State current situation, the percentage of voting in a country depends on a mathematical formula complicated, taking into account the value of GDP but also its degree of economic openness, the importance of its réserves This formula satisfied person and its simplification is under study. Here again, the negotiations are difficult. The United States argue that GDP has paramount importance. Emerging countries, they argue instead for a GDP parity of purchasing power, and not at face value. Which would lead to greatly strengthen their weight. According to the latest proposals in July, the new proposed formula did lead to a transfer of less than 3 of the voting rights to emerging countries. It is the account. In addition, fills the horror that we take into account the old formula or new, some emerging countries have too significant voting rights over their economic weight. This is the case of Saudi Arabia, the Argentina, South Africa and the India. Conversely, rich countries such as the Spain, the Luxembourg and the Ireland are under-represented. Therefore, the equation is complicated and each of the Member countries must make concessions to achieve a transfer of 5 of the voting rights of countries over-represented to under-represented countries. In this game worthy of the Grand Bazaar of Istanbul horse-trading, a second component is invited. The composition of the Board of Directors, the body of the IMF.

It includes, at present, 24 chairs, although the articles of the Fund provide that 20. In fact, the maintenance of the 24 seats thus requires both years, to be reappointed by a vote. Last July, the United States, to the General surprise, threw a keypad in the mare by not voting this renewal. Their goal: reduce, in a gale force, the presence of the European Council, where they occupy 9 seats out of 24. As ironically noted a diplomat, "The United States have gotten from a bullet in the foot." "Return to 20 seats lead to the disappearance of the lowest, i.e. Brazil, India, the Argentina and one of the seats of the African countries". It would lead to the opposite effect to that which is sought. Unthinkable politically.

Before increasing pressure from Washington, the Europeans, accused of having a too conspicuous presence in the Council, are declared themselves ready for concessions by offering the abandonment of two seats. In return, those same Europeans wish that the United States have more of their famous right of veto. It requires a change in the statutes of the IMF, who want the decisions to be approved with 85 of the vote. The United States having 17.5 of the voting rights, they can block any decision which does not befit them. The probability that Washington abandon this privilege is close to zero. As the four major emerging countries gathered in the BRICs (Brazil, Russia, India and China) are not favourable under the pretext to them four, when the redistribution of votes will be effective, they will have the same power of obstruction with more than 15 of the voting rights. As for the idea advocated by the Director General of the IMF, Dominique Strauss-Kahn, to create a chair representing all the countries of the euro area to free up space for other countries, it has little chance to see the day. Indeed, the countries of the euro area have in this case a little more than 28 of the voting rights, which would make it the first shareholders of the Fund. Statutorily, headquarters should then be transferred to Europe! Hard to imagine that the United States waive implementation on their soil of the institution.

The reform of the governance of the IMF advance so difficult, and probably too slowly. One thing is certain however, strengthening the role of the emerging countries within will complicate the task of the institution. The replacement of the G8 by the g-20 has not simplified things. It will be the same for the IMF. Unfortunately.