WASHINGTON – Global finance leaders will do a stocktaking of IMF voting power changes when they meet in Washington this week amid concerns that a key IMF reform package is being held up in the U.S. Congress, a tough sell in a tight budget year.
Without mentioning the United States, IMF Managing Director Christine Lagarde on Wednesday repeated a call to member countries to approve the 2010 package, which would boost the voting power of emerging countries like China and India that have long called for more say in the IMF to reflect their growing economic might.
The voting power issue will be discussed by the Group of 20 developed and emerging countries and by the IMF's steering panel, the International Monetary and Finance Committee, starting on Friday.
"There isn't really much new in terms of issues on the table," a senior International Monetary Fund official, speaking on condition of anonymity, told reporters.
"As soon as the U.S. approves it, it will come into effect. Certainly the view of the membership is that it should happen as soon as possible, and that is certainly our view, and the U.S. is also committed to getting it done," the official said.
While approval of the package is being delayed by the United States, there has been little progress since January among countries on agreeing a new formula for calculating members' voting shares.
The official acknowledged that further discussions hinged on updated economic data due in June.
The 2010 deal was meant to have been fully authorized by countries in October last year. But the Obama administration put off asking Congress to fund it last year to avoid controversy before the November presidential elections.
Some countries believe that delays in the voting reform package and in compiling a new formula will set back the next phase of major vote changes due in January 2014.
The United States has repeatedly said it is committed to the 2010 agreement, a thorny issue for some lawmakers who argue that the U.S. money for the IMF should go toward safeguarding domestic programs that are being cut.
Last week President Barack Obama asked Congress to shift $63 billion of U.S. money from an IMF crisis fund to permanently boost U.S. funding to the IMF.
The request, which would further enhance America's clout within the IMF, will be considered as the appropriations committees start their work in deciding fiscal 2014 funding levels for government agencies and discretionary programs.
Some congressional aides have said U.S. approval of IMF money is unlikely before October.
New Treasury Secretary Jack Lew, testifying recently at a hearing on the president's 2014 budget proposal, argued it was in the interest of the United States to maintain its leadership in the IMF and a veto power over policy decision.
"We have a veto in the IMF, we have a controlling voice when we need to, we have leverage so that the United States can influence the economic decisions around the world, and it is something that our international leadership depends on," Lew told the hearing.
(Reporting by Lesley Wroughton; editing by Xavier Briand)