The U.S. and Europe have yet to reach a compromise on how to increase the voting power of emerging nations in the International Monetary Fund.
The U.S. is calling on Europe to yield some of the nine seats it occupies on the 24-member IMF board to emerging nations in a bid to reflect the latter’s increasing economic powers. Europe has resisted the idea since it was still undecided on how to proceed with the move.
The two sides have until Oct. 31, when the mandate of the existing board expires, to resolve the power struggle.
“The IMF will be in crisis unless a solution is found in time,” a senior board official said.
European Union finance ministers will discuss the matter on Aug. 31, a senior EU official said.
“Inevitably, the discussion will be about giving more room for emerging economies, but the question is how much,” the official told Reuters.
The U.S. recently blocked a resolution to maintain the current form and composition of the International Monetary Fund’s 24-seat executive board in a bid to enable emerging nations have a greater say.
Unless a compromise is reached IMF board seats held by India, Brazil, Argentina and Rwanda would be scrapped. If Europe gives in, small EU nations such as Belgium, the Netherlands and Scandinavian states may lose seats.