The European Commission gives a serious consideration to the appearance of an alternative to International Monetary Fund in the Old World. The talks about the establishment of the European IMF are to be finished by July 1 of the current year. The haste most likely arose against the background of the crisis in Greece, which unveiled the vulnerability of the financial system in the European Union.
The idea sprang from Wolfgang Schaeuble, the Finance Minister of Germany. Other members of the governmental coalition of Germany supported the minister’s suggestion. Deutsche Bank’s chief economist Thomas Mayer said that the new fund would be especially important to establish better control over the countries of the Eurozone.
Developed countries of the European Union have not asked for IMF’s loans since 1976.
The IMF was founded in 1944. The fund has 184 member countries, but it is virtually supervised by the most influential member – the United States of America. Japan, Germany, France and Britain own considerable quotas in the fund too. The fund has its special payment unit – SDR (Special Drawing Right).
Key issues can only be solved with the majority of votes – 85 percent. Therefore, even 30.3 percent of votes, which EU members have at the IMF, can do nothing without the USA’s 17.9 percent.
It is an open secret that the IMF has a number of requirements, which a credit-seeking country has to meet to receive financial assistance from the fund. In addition to tough financial requirements, the IMF demands the execution of structural reforms in national economies.
Greece ’s talks with the IMF may put the European fiscal system into a very difficult situation. As a result, Greece may become the Trojan horse of the Eurozone.
Germany , the largest economy in the European Union, is entitled to hope for privileged positions in the European currency fund, similar to the USA’s positions in the IMF.
Spokespeople for the European Commission say that the new European fund would have to first and foremost prevent the emergence of economic difficulties in the EU, the AP reports.
The EU initiative, if realized, will trigger global consequences. Here it goes about the defragmentation of the dollar system. One should bear in mind the fact that two world wars of the 20th century were closely connected with the financial crisis and the functioning of the US dollar.
Germany ’s Wolfgang Schaeuble believes that the Eurozone wants to solve its problems independently. Accepting the financial help from the IMF, the minister said, would be equal to acknowledging Europe’s incapability in handling the problems.