Verbatim report of proceedings

Thursday, 16 February 2006 - Strasbourg

12. Strategic review of the IMF (debate)

  President. The next item is the report (A6-0022/2006) by Mr Hamon, on behalf of the Committee on Economic and Monetary Affairs, on the strategic review of the International Monetary Fund (2005/2121(INI).

  Joaquín Almunia, Member of the Commission. (ES) Mr President, ladies and gentlemen, I consider the report being debated today in Parliament, drawn up by the rapporteur, Mr Hamon, and discussed by the members of the Committee on Economic and Monetary Affairs, to be very timely, since the International Monetary Fund is in the midst of debating its strategic review on the basis of the document presented by its Executive Director.

As you know, the Commission does not have any direct or formal presence in the International Monetary Fund, and nor does the European Union. It is the Member States that are represented. But we must bear in mind that the Member States represented in the European Union and this House account for more than 30% of the shareholders in the International Monetary Fund.

This contribution to the debate therefore seems to me to be extremely useful, in terms of how to ensure greater economic and financial stability in the global economy, with the development of the least developed countries and the eradication of poverty included within this notion of stability.

In order to achieve these objectives, there is no doubt that the assistance of the institutions with the capacity for global action, such as the International Monetary Fund, is needed.

The first thing that strikes us when we analyse the role of the Monetary Fund in the world economy at the beginning of the 21st century is that the objectives set for it when it was created in 1944 are still relevant today.

Nevertheless, while the objectives of promoting international monetary stability — those of facilitating the expansion of international trade, promoting exchange stability and lessening the degree of disequilibrium in balances of payments — are still entirely appropriate, the economic context within which the Fund is operating today is radically different to the context of sixty years ago.

This fact is recognised by the Fund in its strategic review, of course, in which it states that the challenge of globalisation is central to the work entrusted to that institution. The Fund’s new approach is therefore to look at its essential tasks of monitoring and lending within the context of globalisation.

To this end, the Fund takes account of both the risks and the opportunities. For example, in its strategic document, it acknowledges that the free movement of capital allows for a more efficient allocation of resources, but at the same time it also points out that it leads to greater volatility and greater risk of extreme reactions by the markets in the event of crisis. It also notes the impetus provided by the emerging economies, which are making a great contribution to the high levels of growth in the world economy, but also notes that the power of these emerging economies is making it more difficult for the poorest countries to jump on the bandwagon of world trade and world growth.

The Commission shares the view of globalisation expressed by the Fund in its strategic document; we communicate our views to the International Monetary Fund during the fluid and frequent contacts that we hold with that institution. In particular, as you know, we cooperate with the Monetary Fund in defining our policies and adopting our decisions on the macrofinancial assistance that the European Community gives to countries of the Western Balkans or some of the States that were formerly part of the Soviet Union. Macrofinancial assistance, based on the resources of the Community budget, is always linked to a series of conditions that are complementary to the Fund’s interventions in those same countries.

In the field of development aid and the eradication of poverty, the Monetary Fund, together with the World Bank and the European Union, are undoubtedly the main world players and, in this case, there is also close and productive cooperation between the different institutions.

All of these aspects are taken up in one way or another in the report that we are debating today, and the Commission is very happy to express its agreement with the positions expressed by the rapporteur and supported by the Committee on Economic and Monetary Affairs.

The report also stresses the need to distribute the quotas and voting rights within the Fund’s governing institutions in a manner that reflects the relative weight of the different economies of the member countries in a more balanced manner. This will give the least-developed countries and, in particular, the African countries, a greater voice, since their current quota of representation and capital in the Fund is very low.

As the Monetary Fund points out in its documents, carrying out this reform of the distribution of quotas and voting rights is the responsibility of the shareholder countries and requires significant political will. It has to be appreciated that to increase some people’s quotas at the expense of others may benefit everybody in the medium and long term because it will allow the Fund to carry out its duties more effectively and fulfil the objectives set for it.

My final point, Mr President, relates to the external representation of the eurozone and of the European Union in economic and monetary matters. I would like to thank the rapporteur and all of the honourable Members who have included this point in the report that we are debating today, though I would like to point out — as I believe I said in this same Chamber last year — that the Commission would prefer a clearer and more direct formulation of the objective of a more appropriate external representation of the eurozone and of the European Union as a whole, such as that proposed in Amendment 5, presented by Mr Purvis, for example.

Together with the Presidency of the Eurogroup, the Commission has begun reflecting on how to move towards this more effective external representation of the eurozone and, eventually, of the European Union. Through will and realism, we are trying gradually to draw up a consistent approach that will enable us to make progress towards better coordination amongst the members of the eurozone when it comes to expressing a position in international financial institutions. In the short term, the intention is to identify items in the programmes of these institutions with regard to which the Member States can achieve a coordinated position, such as in the field of budgetary monitoring, for example. In the long term, the objective is still to achieve a single representation for the eurozone in the Fund, which will allow it to exert an influence equivalent to the economic weight of the Monetary Union. To this end, the strong political support of the Member States will undoubtedly be required.

The Commission believes that Parliament can and must make a significant contribution to giving form to this aspiration, expressing its opinion in this regard as clearly as possible.

I shall end, Mr President, by saying that the Commission is prepared to study how Parliament can participate in the formulation of the positions that the representatives of the eurozone and of the European Union are required to express in international financial bodies and institutions. This issue must be examined. It is not easy to find a way, but, in any event, I can assure all of the honourable Members that the Commission and myself are fully prepared to go further into this issue whenever you see fit.

  Benoît Hamon (PSE), rapporteur. – (FR) Mr President, I thank Commissioner Almunia for the favourable welcome he has given my report, which is also the report of the Committee on Economic and Monetary Affairs.

Allow me to emphasise a fact that is important enough to be worth pointing out: the Committee on Economic and Monetary Affairs voted unanimously in favour of this report. I would also like to pay tribute to the work of the Committee on Development and the Committee on International Trade, and in particular that of their draftsmen, Mr Wijkman and Mr Bourlanges, who have greatly contributed to improving this report that comes at a time when the International Monetary Fund is reflecting on its strategy and on how to assess the development of its mission, the impact of its policies and the way in which it works.

I would like to return to the spirit in which the shadow rapporteurs and the entire committee worked to ensure that our Parliament's report makes a useful contribution to the strategic revision of the International Monetary Fund whilst taking account of the major challenges facing the fund: first the issue of its governance, then the issue of its economic doctrine and of the impact of its choices on the Millennium Goals, and finally, more generally, the way in which, through its role of monitoring and crisis prevention, it now continues to guarantee global macroeconomic and financial stability.

On the issue of governance, let me remind you that the Member States are currently divided into nine constituencies, which means that the European Union, if we can talk about the European Union in this context, has no unified representation. It is thus through these nine fragmented constituencies that the European Union expresses its opinion. It can also be seen - and this point is stressed in the report - that there is little or no coordination between the Member States within the International Monetary Fund. That is why this report advocates, firstly, strengthening coordination between the European seats and, secondly, step-by-step progress towards representation for the European Union as a whole within the International Monetary Fund with, of course, the prospect of a single seat, passing in the meantime via a single seat for the Eurozone.

As it stands, the report does not exactly refer to the issue of the single seat, but sets the objective of ensuring that the European Union is represented and votes as a single block within the International Monetary Fund, which seems to me to be an absolutely vital step. Why is it vital? Because it would give the European Union the blocking minority that it does not currently have, in other words 15% of the voting rights within the International Monetary Fund. The United States are currently the only ones to have a blocking minority, and we know what impact it can have on the major political and strategic choices that the International Monetary Fund has been able to make. That is a very important key element.

I would add that these changes in the European Union's representation may also make it possible to resolve the issue of the distribution of voting rights and thus of the influence of the emerging economies and developing countries within the governing body of the International Monetary Fund. We feel that the representation of the emerging economies should be in better proportion to their economic weight. It is also necessary for the countries with the biggest populations but the smallest economies, in other words the developing countries, to have much greater voting rights than they currently do, for the simple reason that they are the 'beneficiaries' of the International Monetary Fund's policies. That is why the report advocates increasing the number of basic votes: in any event, this is one of the possibilities to explore in the immediate future.

The second point we are emphasising relates to the issue of the legitimacy of the International Monetary Fund's interventions, particularly when the scope of those interventions is becoming ever wider. We favour improving the transparency of the International Monetary Fund and the way it works. I am thinking in particular of the recruitment of experts and of the need to diversify their profiles, so that they can more easily adapt their recommendations to the diversity of the situations they encounter.

The final point, which is just as tricky, relates to the way in which we can assess the structural adjustment policies and the International Monetary Fund's recommendations over a number of years. Today, the Fund is much criticised for the implementation of some of its recommendations, for its macroeconomic doctrine and for its rather too strict application of the Washington consensus. That is what led us to call on it to demonstrate greater flexibility and to find the best way of ensuring that the local authorities and countries concerned establish poverty-reduction strategies. This seems to us to be a very important step.

We have also suggested that some of the Fund's interventions have not been infallible if you look at the results obtained, the social costs of the structural adjustment plans, or the spread, or even reappearance, of crises. We have emphasised these points to encourage the Fund to alter some of its choices as part of its strategic review.

I would add, and I would like to stress this point, that we must not end up, in terms of world governance, with a kind of implicit hierarchy of standards that tries to place the Fund's recommendations at the pinnacle under the pretext that they affect not only macroeconomic stability and growth policies, but also labour market policies, the funding of social programmes, education and health. We must not end up with this hierarchy of standards placing the Fund's recommendations above all other international organisations, sometimes to the point of producing out-and-out contradictions between the Fund's recommendations and those of the international agreements of the International Labour Organisation or the World Health Organisation.

To conclude, we hope that the European Parliament feels more involved, particularly with the prospect of a single representation for the European Union, in the responsibility of the EU's administrators within the International Monetary Fund. We hope that, just as the Fund maintains regular relations with the US Congress, it will maintain regular relations with the European Parliament and that it will be equally accountable and responsible to the representatives of the European people.

  Jean-Louis Bourlanges (ALDE), draftsman of the opinion of the Committee on International Trade. – (FR) Mr President, the Committee on International Trade has issued an opinion that very closely matches Mr Hamon's excellent report, and I think that they really do contain very convergent opinions and very similar concerns.

We have three main concerns. First of all, like the rapporteur, we aspire to better coordination of all development policies. We have put our finger on a contradiction: the International Monetary Fund is a part of a whole, with a specific responsibility, but at the same time it is much more than a part of a whole, because, as the lender of last resort, it has, as Mr Hamon has just mentioned, a sort of de facto pre-eminence that is not without its problems, resulting in a quest for better coordination with other international organisations, particularly the World Trade Organisation, the International Labour Organisation and the World Health Organisation. We need to think carefully about these coordination methods.

Secondly, we want to see a redistribution of powers. We do not want to succumb to an excessive demographic fever that would cut us off from the global economic reality, but we feel that, as it stands, the emerging economies are not adequately represented and that power must be redistributed to those economies.

Finally, we, like the rapporteur, would like Europe to speak with one voice and act as one. It really is distressing to see that Europe, which, across all the Member States, has almost twice as many votes as the United States, counts for so little within the organisation. Can we start moving towards the single seat right now? Probably not, but we do need to start moving towards informal models comparable with shareholder agreements, starting with the Eurozone and with the aim of subsequently getting the whole of the European Union to speak with one voice. Those are our concerns, and I do not think that they contradict Mr Hamon's.

  John Purvis, on behalf of the PPE-DE Group. – Mr President, I would first of all like to thank Mr Hamon for the enjoyable way in which we have worked together on this report. It has been an interesting and, I hope, ultimately productive example of collaboration between our respective groups.

The PPE-DE Group welcomes the IMF’s review of its activities and of its future direction. The Fund has played an important role in the global economy for more than 60 years and we want it to carry on doing so, but to do this it needs to refocus on its core mandate of promoting financial stability and supporting countries with balance of payments difficulties. It has a key role in supervising the world’s monetary system and helping to prevent and deal with crises. Its surveillance role needs to be stepped up to concentrate on reducing global financial instability and advising individual countries about financial stability, economic growth, exchange rates and reserve accumulation, because these are essential preconditions if countries are to avoid and get out of difficulties and poverty traps.

The Fund has been criticised for its conditions when lending to financially stretched countries. I share the concerns that these conditions may have been too rigid at times but, as a responsible lender and custodian of funds, the IMF must be able to impose conditions when lending money. The requirements it sets out are there to improve a country’s economic situation by opening up markets and promoting sensible economic policies, good governance and sound financial management. Often, indeed, the IMF is a useful scapegoat for governments having to force through unpopular reforms.

Turning to Europe’s role in the IMF: as Mr Hamon said, the EU is currently spread over nine constituencies – I thought it was ten but perhaps he is right in saying nine – and has lacked any semblance of a cohesive position in setting IMF policy. A first priority, therefore, should be better coordination. There are advantages in being in different constituencies, not least that the EU has greater voting power than any other part of the world and can better influence non-EU countries within these constituencies, but this counts for little if our Member States are at sixes and sevens. A single EU seat is not a realistic goal just now, even if it is an aspiration for the long term, but much more could be achieved right away by better coordination of Member States’ positions.

My group will submit some amendments and some split votes in order to help improve Mr Hamon’s report which, overall, we hope to support.

  Ieke van den Burg, on behalf of the PSE Group. – Mr President, I wish to thank the rapporteur and the other groups for their good cooperation in committee. I hope that the decision to postpone the vote on this report will provide an opportunity to assess which of the amendments tabled improve the report and which have the opposite effect. Perhaps we can find some compromises in the meantime.

I also agree that this is the right moment for Parliament to have this debate and that this is the right moment for this report, given that a strategic review of the IMF is taking place and the Economic and Financial Committee has produced a paper that will be discussed in the Ecofin Council. For us, too, the role of the IMF in strengthening the stability and solidity of the international financial system is a core issue. However, we should also like to see more focus and attention on social and public policy aspects, and that is why my group retabled some previous amendments.

On the constituencies issue and the single seat, both of you have already touched upon how we could strengthen the European voice vis-à-vis other parts of the world. The rapporteur is aware of my own observations on this debate concerning the situation in the Netherlands, in particular, and Belgium, which are in a broader constituency and subject to effects of this kind, but I believe that we could try to find a good formulation on strengthening the European voice and on strengthening the voice of the less-developed countries in the structure in particular.

The other amendment we would draw attention to is that concerning transparency and dialogue with NGOs. Here, the IMF could learn from many other international institutions, including our own European Investment Bank, on how to improve dialogue with, and consultation of, NGOs in their work. It might be important to stress this, as well as the issue of the accountability of EU representatives in the IMF. We see a role for the European Parliament in that as a follow-up to this debate, and we hope that we can agree on finding methods and structures, such as the ad hoc working party proposed in our amendments, to create a follow-up on this.

  Diamanto Manolakou, on behalf of the GUE/NGL Group. – (EL) Mr President, multiple financial crises, the rise in the number of poor countries and the exponential increase in their debts prove that the International Monetary Fund is the main means of promoting imperialist interests. It is an international organisation at the service of capital, which uses it to impose its choices on the peoples whose countries need loans, on the sole pretext of currency stability and balanced development.

The International Monetary Fund is engaging in political blackmail against the countries which need its loans, by imposing despicable conditions relating to all public policies and cutting public spending, especially on education, health, social protection and every sector which affects a balanced budget. The policy of harsh austerity and the unacceptable social terms imposed on countries which take recourse to it are designed to protect lenders and safeguard their capital, privileges and profits. They are characterised by disdain for the social consequences and provoke a general outcry and mass demonstrations when it meets.

However, it is not the outcry which results in its strategic review. On the contrary, the International Monetary Fund will acquire an even more aggressive character towards the interests of the workers following a review which will adapt its structure, administration and action, as well as its sectors of direct and indirect intervention in the new reality which emerged from the overturning of the socialist regimes and the new balances between the imperialist centres and the new targets of imperialism, which result in even greater exploitation of the workers and of wealth-generating resources, under the umbrella, of course, of the United Nations.

The European Union, in other words Euro-unifying capital, is seeking joint and coordinated participation in the International Monetary Fund, so as to increase its share of influence and profitability, not to change its policy, given that it is promoting a similar policy through capitalist restructurings and the Lisbon Strategy, by commercialising basic grass-roots needs.

The proposed administrative changes are nothing more than make-up which tries to conceal the truth. Only the fights of the peoples against imperialism and its institutions, against the choices of capital, can bring about changes on the basis of equal relations and mutual benefit, in order to achieve development which will guarantee grass-roots prosperity.

  Nigel Farage, on behalf of the IND/DEM Group. – Mr President, this debate gets to the very heart of what the European Union is all about.

In the United Kingdom – and I am sure in many other countries – the argument that was used when we first joined and continues to be used is that we are in the EU because we have greater influence in the world if we speak together with one voice. Well, I look at the WTO; I look at trade talks, where already no individual state may speak on her own behalf. What do I see? I see a Hong Kong summit that failed in December, despite the generous offer made by the Americans, and I see a situation where certainly the globe’s third largest trading nation could have done a rather better job for herself.

This proposal for a single European seat is certainly not going to suit Britain, Denmark, or Sweden. We are not even in the euro. As far as the United Kingdom is concerned, 1976 – when we went cap in hand to the IMF – is a dim and distant memory. A single IMF seat is not about economic logic; it is purely about politics. It is purely about turning the European Union into an international superstate. As we heard in one or two of the previous speeches, it is about standing up and forming a bloc to oppose America. The same logic is being applied elsewhere when it comes to the United Nations Security Council. I ask myself – whether it is the United Kingdom, France, Germany or any other country – do we have more influence in the world speaking as 25, speaking with one voice? Or do we have more influence if we are able to put our own opinions forward and speak on behalf of our own people? I know the answer, but I suspect that most people in this House do not.

  Peter Baco (NI). – (SK) More than five years ago, financial authorities, including the financier Mr George Soros, were already issuing warnings and calling on the governments of the world to adopt measures to ensure the stability and transparency of financial markets.

The proposed European Parliament resolution on the strategy for reviewing the International Monetary Fund is therefore correct in highlighting the role of this international institution in securing financial stability. The draft resolution also correctly points out that this task has not been fully implemented, as a result of a lack of transparent global scrutiny over the standardisation process in the area of financial markets. The full implementation of this task by the International Monetary Fund would undoubtedly have a positive impact on financial market stability.

Increasing pressures in the financial markets also result from the constantly increasing volume of trading in derivatives, with the United States of America playing a leading role. The volume of trading in derivatives has long since become many times greater than the volume of transfers in the real money sector. Developments in derivatives’ trading may therefore become a time bomb for the world’s financial markets and the world economy as a whole, and I believe that our report should give much more prominence to this issue. For this reason, I am going to support the resolution proposed by the rapporteur, Mr Hamon. I would also like to express my thanks for his work.

  Cristóbal Montoro Romero (PPE-DE). – (ES) Mr President, Commissioner, firstly, this report is very timely at this point, since the International Monetary Fund and other multilateral bodies have been with us for some years now, with the task of regulating the conditions of the world economy.

I believe that this is a story of success. A relative success, like all successes, ladies and gentlemen, but a success nonetheless, in relation too to the functioning of the International Monetary Fund, which has now put the kind of world crises that we have experienced during the history of the developed countries and in the developing countries behind us.

The emphasis placed by the International Monetary Fund on macroeconomic stability is fundamental in order to promote equal opportunities for economic development for everybody. Today we see it as essential for economic development to be based on a healthy balance of payments, inflation control and the balancing of budgets in the developing States. These healthy balances of public finances are fundamental to creating climates of confidence and, ultimately, to enabling a State to progress and develop higher levels of well-being and, in turn, to promote economic growth. From that point of view, our report must place clear emphasis on stability.

With regard to the European Union’s presence, we must not forget the problems we are currently facing within the European Union in terms of coordination and, therefore, although in the medium and long term we must move towards a single voice in the Monetary Fund and in other multilateral bodies regulating the world economy, we must be prudent and modest, as Mr Purvis pointed out, bearing in mind that, at the moment, we proceed on the basis of our various countries being represented in different categories.

Furthermore, it is important, as in the case of Spain, that we stand shoulder to shoulder with much of Central America and Latin America, so that we also take more account of the economic development of a region as essential as Latin America in order to ensure balance in world development and to ensure development and equal opportunities for Latin American countries.

This report therefore offers an opportunity for this Parliament to express its opinion and, in this regard, I hope that we are also working to achieve the greatest possible consensus and that this report will make a positive contribution to defining the role that needs to be played by multilateral bodies in modern economies.

  Manuel António dos Santos (PSE). – (PT) Mr President, Commissioner, ladies and gentlemen, I should like to ask a number of questions about this report. Many of them have already been addressed, however, so I restrict myself to talking about two of them.

I wish to remind the Chamber that on 12 April 2005, Parliament adopted an important resolution, which set out the EU’s role in implementing the Millennium Development Goals. This commitment for the EU to eliminate poverty has been repeated on countless occasions, which, quite apart from being consistent, provides real substance to policies specifically geared towards global development.

It is from this perspective that we should be analysing the own-initiative report by Mr Hamon, which is commendable for the information it provides and for the solutions it proposes for the much needed strategic reform of the International Monetary Fund (IMF).

The international community’s concerns and commitments as regards the development goals should also be attributable to the IMF, at least on an instrumental level. The Fund must also undergo a thorough-going transformation of its action towards the indebted countries if it is to make full use of its capacity to meet these objectives.

Whatever opinions may have been formed of the IMF since it was set up in 1944, what is indisputable is that it is facing a crisis of legitimacy, firstly relating to the nature and scope of its recommendations and the structural adjustment policies, and secondly relating to the allocation of voting rights and the marginal representation of the emerging countries and developing countries.

This brings me to the second question, which is that of the European dimension. On this issue I have high hopes. Although I appreciate the difficulties mentioned here of setting up a single representation and a single place immediately, I am very much in favour of a single representation and a single place. This is a political problem mentioned to me in a critical tone by an MEP who had the floor before me. It is actually a matter of choice and a political problem that lies within the EU itself.

It is the EU that needs first to pave the way for conciliation and coordination if it is to deserve this position of single representation in the IMF.

One thing I know without fear of contradiction: a single, coherent, audible European voice in the IMF is an essential prerequisite for a genuine cooperation policy.

This is also the thrust of Mr Hamon’s message, and he has my full support.

  Jonas Sjöstedt (GUE/NGL). – (SV) Mr President, I should firstly like to thank the rapporteur for a generally constructive report. I share most of the views expressed in it. The report contains an in itself unobtrusive, but nonetheless clear, criticism of the International Monetary Fund’s structural programme and of the conditions imposed on recipient countries. Such criticism is crucial because this policy has, in actual fact, exacerbated poverty and increased social problems in many countries. It is therefore vital that the issues highlighted by the report, namely the fight against poverty and the need to achieve the Millennium Goals, be incorporated as overarching objectives of IMF policy. In the longer term, this type of institution ought no doubt to be a part of the UN system and of a coherent development policy.

I also join in the criticism of the lack of democracy in the IMF. What is crucial in this area is that the developing countries should have more power, and what is perhaps most important in this respect is their need to be given a fairer share of the votes when decisions are taken. Democratisation must, however, also mean that a developing country can be given the Managing Directorship. This post should not go automatically to one or other of the richest countries. Democratic control within the EU should also increase, but it should be exercised by the national parliaments. I do not think it would be fair to transfer power over IMF policy to the EU institutions, and I am therefore opposed to Amendment 5. I believe that policy within the World Trade Organisation is a shocking example of a lack of democratic control over EU policy.

For many years, there has been a prevailing tendency to place undue confidence in deregulation and free currency speculation. The majority of monetary movements are now downright speculative. If macroeconomic stability is to be achieved, there is a need for self-protection against these trends, at both national and international levels.

We have tabled an amendment of our own which is, I suppose, in keeping with the demands for increased democracy in the IMF and through which we wish to increase scrutiny, and we hope that it will be adopted. We shall vote against the proposal by the Group of the European People’s Party (Christian Democrats) and European Democrats, but in favour of most of the proposals by the Socialist Group in the European Parliament.

  Ryszard Czarnecki (NI). – (PL) Mr President, as a rule we do not go in for plain speaking in this House. We tend to prefer euphemisms and diplomatic niceties, but today I will venture to call a spade a spade. The report before us is basically a scathing criticism of the International Monetary Fund.

Today, the European Parliament has the opportunity to say what critics of the Fund have been saying for years. The report rightly highlights the fact that, I quote, ‘the stabilisation policies implemented by the IMF have not always achieved the objectives hoped for and whereas stabilising economies too suddenly is likely to result in undesirable social adjustments’. We also agree that, I quote, ‘the monitoring of these programmes should be the subject of transparent democratic supervision’.

The Fund sometimes acts as if it were operating in the middle of the jungle, though it is a jungle whose rules it has itself created.

The number of conditions poor countries have to comply with in order to obtain assistance has been growing year on year. An example is the absurd situation that sub-Saharan African countries find themselves in, where they have to fulfil an average of 114 conditions in order to have access to funding.

The rapporteur has rightly emphasised the need to set up new financial tools. The Fund has too many priorities when it comes to reducing the debt of the poorest states. The IMF has to go back to its original role. Its main aim used to be global exchange rate stability, and this should still be the case today, as a previous speaker mentioned a short while ago.

In his report, Mr Hanon is right to state that the increase in the Fund’s tasks has not been accompanied by any significant reform of its management. We are therefore entitled to demand enhancement of the Fund’s legitimacy.

The rapporteur quite correctly points out that the Fund, and I quote, ‘has sometimes failed to prevent crises from becoming infectious and recurring’.

We wholeheartedly agree with the criticisms levelled at the Fund. We agree that its policy fails to take account of the fact that inflation is not the only economic problem facing developing countries, and that the Fund should focus on achieving macroeconomic stability and sustainable growth. Finally, we are pleased with the conclusions drawn in the report, namely that macroeconomic stability is not at odds with the fair distribution of growth.

  Joaquín Almunia, Member of the Commission. (ES) Mr President, I would simply like once again to thank the rapporteur and the members of the committees who have been involved in the drawing up of this report, which, as I said in my initial speech, seems to me to be extremely useful.

I would emphasise the importance of the discussion that is taking place and that, it is hoped, will end at the Fund’s Assembly in Singapore, in September, with a new distribution of quotas which, in turn, will be linked to a new distribution of voting rights and hence to the governance of the Fund, which is something that can be improved.

I believe that it is important for the European voice to cooperate in establishing a clear approach to improving the governance of the Fund and the representation of the different States in the Fund’s governing institutions, in accordance with fair criteria.

I would emphasise the importance — and I believe that the huge majority of you will agree with me — of greater coordination of the countries of the European Union in terms of the positions taken by the European Member States in the Fund.

If we want the coordination of economic policies to progress, if we want there to be greater integration amongst the different Member States in the internal market and in the Economic and Monetary Union and if we want Europe’s external influence also to have an economic dimension, it is important that the European Union’s external economic dimension is also reflected in the deliberations and discussions of the Monetary Fund.

I believe that the European Parliament’s role with regard to the Monetary Fund will progress as we move forward with the coordination of the European voice in the Fund’s institutions, until eventually — I am convinced that we will get there, though not in the short term — we have a single voice and single representation for the countries of the European single currency in the Monetary Fund. This will not happen today, or tomorrow, but it is a direction that I believe to be both inevitable and desirable.

I shall add finally that reference has been made — and I share this concern — to the need for the Monetary Fund to act in coordination with the strategies also set out in other fields by multilateral organisations and, in particular, by the organisations of the United Nations system.

I believe that we must be pleased that the Monetary Fund is involved in and committed to the achievement of the Millennium Goals. Achieving these is one of the international community’s fundamental objectives. I believe that the Fund’s involvement and commitment, which would perhaps have been difficult to imagine fifteen years ago, are today a reality.

  President. The debate is closed.

The vote will take place in the March part-session.

Written statement (Rule 142)

  Lars Wohlin (IND/DEM). – (SV) The IMF’s board of directors consists of 25 people, each of whom represents an individual country or group of countries. The EU countries are represented individually or as members of nine of these groups.

The Nordic Group consists of the Nordic countries and the Baltic states and thus includes countries such as Norway and Iceland, which are not members of the EU.

The IMF’s role has changed since the organisation was founded immediately after the Second World War. Operating within a system of fixed exchange rates, its main tasks from the beginning were both to help countries with balance of payments problems temporarily to fund deficits in the balance of current payments and to check that the countries concerned were taking good care of their economies. It was also important that the countries did not devalue their currencies in order to become more competitive. Nowadays, the eurocountries, armed with their European Central Bank, have approximately the same role as the IMF. The eurocountries have fixed exchange rates. Possible concessional credits to eurocountries that end up in financial crises need to be handled within the group of eurocountries.

Countries outside the eurozone have fluctuating exchange rates and do not therefore end up with balance of payments problems. They also have better control of their debt ratios. It would be natural for the eurocountries to form a common group in the IMF, with one headquarters. EU countries outside the eurozone should not be part of the group. Nor is there any reason for Sweden to form part of a common EU group. If it were, we should also lose our ability actively to influence the IMF’s relations with the developing countries.