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EU backs IMF quota system reform plan.

BRDO, Slovenia: The European Union backs a proposal put forward by the International Monetary Fund's executive board to give countries like China and India more voting rights within the lender, EU president Slovenia said.

The Washington-based fund has recommended the plan to overhaul the IMF's complex quota system to its full membership for a final vote this month. EU finance ministers travel to Washington next week for the IMF's spring meeting.

At meeting in Brdo, EU ministers agreed to present a united front on the changes, the Slovenian government said yesterday.

"(The) reform will achieve a significant shift in the representation of dynamic economies, many of which are emerging market countries, and give poorer countries a greater say in running the multilateral institution," it said in a statement.

The plan would boost the voting shares of emerging economic powers China, India and Brazil. At the same time, it will reduce that of countries like Russia and Argentina, as well as slightly lower those of the Germany, Britain, France and others.

IMF Managing Director Dominique Strauss-Kahn said late last month that all but five of the IMF's 24-member board members backed the changes. Egypt, Iran, Saudi Arabia, Russia and Argentina either voted against it or abstained.

If approved, it will be one of the most comprehensive overhauls of the IMF's voting system in 60 years, aimed at recognising the rapid rise of economies like China.

German Finance Minister Peer Steinbrueck hailed the fact a deal on the reform looked possible, describing it as "almost positively surprising."

The EU's finance ministers and central governors said the IMF needed to establish an integrated budgetary framework for the IMF, with a new income model based on different sources of income.

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Publication:Gulf Daily News (Manama, Bahrain)
Date:Jun 11, 2008
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