On the fight brewing between the US and Europe over IMF board seats that I wrote about last week, David Bosco at Foreign Policy has been talking to Ted Truman, a former US Treasury official now at the Institute for International Economics. Truman’s take:
First, he argues that the American gambit was not sudden but is a response to what he characterizes as longstanding European intransigence. He believes that Europe has failed repeatedly to respond to American signals of discontent over the past five years. “In 2008 and 2009, they basically said that this issue was not on the table,” he recalls. In that context, the new U.S. position is “an aggressive move in the context of a pretty aggressive defense.”
He also emphasizes the oddity of current European policymaking in a body like the IMF. It’s not as if each of the European seats offers a unique policy perspective. Through the EU, individual member states coordinate their positions in advance. “They just get eight to ten voices every time an issue comes up,” he says. Truman contends that it might actually be better to revert to a smaller board, not least for reasons of cost. IMF executive directors and their staffs are relatively expensive, and in today’s environment of budget-slimming there could be some non-trivial savings for the Fund in a pared-down board.
On this issue, Washington is aligned with India, China and Brazil in an effort to tame traditional European prerogatives. If that trend continues, it could spell trouble for Europe in the world of multilateral institutions.