Wednesday, May 5, 2010

Bring the IMF to Europe...literally

Europe could bring not only the IMF money to the old continent, but the institution as well. Just one show of Europeanism would suffice.

It was bound to happen eventually. The share of emerging markets in the world economy is much higher than some ten years ago, let alone half a century ago. Despite their increasing weight, it was as the time stood still at international institutions such as the International Monetary Fund and the World Bank. Sure, last year some emerging markets (by the way, don’t we need another term, as those markets have emerged by now?) got a few more votes at the IMF, but it was nothing spectacular.
It is a different story at the World Bank though. Voting shares of some emerging and developing countries have increased sharply under the new agreement. China now has more to say than Germany, Great Britain or France. In the near future, the gap between young brides in the world economy, i.e. countries like China, and the three grand old ladies of Europe will become even larger. Even with the new agreement, the voting share of emerging markets remains too low given the (fast increasing) size of their economies.

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