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IMF to move on new plan after US snubs reforms again
[WASHINGTON] The International Monetary Fund will begin weighing options in January for a new set of crucial governance and funding reforms after the US Congress again refused to ratify the existing plan.
Spokesman William Murray said Thursday that the IMF board would meet next month to weigh "alternative options" to the 2010 reform plan held up by Congress's reticence to endorse it.
"We are following developments on Capitol Hill very closely. Our position regarding the need to rapidly advance the Fund's quota and governance reforms remains unchanged," Mr Murray told reporters.
"Prompt entry into force of the 2010 quota and governance reforms is of utmost importance to preserve the quota-based nature of the IMF, and strengthen its legitimacy, effectiveness and relevance," he said.
The IMF was left hanging Wednesday after US legislators failed to endorse the reforms in the final budget legislation of the year.
After waiting more than two years, the IMF had held out hopes that the reforms, backed by the White House, would be accepted in the huge budget bill that was under discussion this week.
But the bill that emerged from tough negotiations between Democrats and Republicans late Tuesday night excluded the reforms.
The reforms to the Fund's membership quota system - essentially its shareholding - would both strengthen the global crisis lender's funding and also give emerging economies like China and Russia greater say in it.
Washington officially supported the reforms in 2010 when they were formulated. As the IMF's largest single shareholder by far, the US ratification is essential to get the necessary endorsement of 85 per cent of the membership by voting power.
Fund officials said earlier that they had been encouraged to wait to the end of this year, after the November Congressional elections, for a possible ratification.
In October, IMF managing director Christine Lagarde jokingly promised to perform a belly dance in front of Congress if it gave its official approval.
"I will do belly-dancing, if that's what it takes to get the US to ratify," she said.
But continued Republican opposition, both to giving the IMF more funding and also to allowing even a slight watering-down of US influence in the body, again left the reform endorsement out of the final legislation of the year.
Citing the Fund's official work programme for 2015 released on Thursday, Mr Murray said the board will look at options for a "Plan B" in January.