Turkey may obtain a seat on the International Monetary Fund’s board of directors as a result of talks to give emerging economies more say at the institution, Deputy Prime Minister Ali Babacan said.
“There is an effort to win representative status for Turkey on the board,” Babacan said in a telephone interview today. “But there is no final decision.”
The U.S. unexpectedly forced a debate last month on which countries should be represented on the IMF’s 24-member board. The push to give emerging nations such as China, South Korea and Turkey a bigger say in IMF decisions may cost some European countries a seat at the table.
Turkey is currently part of a group of nations represented at the board by a Belgian director and an Austrian alternate executive director. The number of European seats at the board varies from eight to nine depending on the year, with Germany, France and the U.K. each having their own along with the U.S. and Japan.
Babacan said he hopes the topic will be discussed at the IMF annual meetings next month.
Domenico Lombardi, a former IMF board member and now a senior fellow at the Brookings Institution, said European nations are discussing a proposal to have Turkey rotate a seat with Belgium.
Having a seat “has been a long-standing ambition of Turkey and now there’s a very good window of opportunity for this ambition to materialize,” he said in a telephone interview. “It is a country at the boundary between Europe and Asia and therefore its rising within the ranks of the IMF members is symbolic in a number of respects.”
Calls to a spokeswoman for Belgian Finance Minister Didier Reynders were not immediately returned.
Pressure on Europe
Europe is under pressure to reduce its representation. Without an agreement by November, the IMF board would revert to its original size of 20 seats, cutting off countries including Brazil and India.
The Washington-based IMF “which was set up in the wake of World War II, still has a very unbalanced governance structure, where a set of countries, principally European countries, have eight seats on the board,” Treasury Secretary Timothy F. Geithner said in testimony at a Senate Banking Committee hearing today.
“They have a much more disproportionate share of votes in the IMF than is commensurate with their economic -- relative economic strength in the world,” he said, adding that the U.S. supports “a change in the balance of power to catch up to this big shift in global activity.”
The U.S.’s power of veto on important decisions at the IMF could be removed in return for Europe accepting a reduced voting position, Germany’s Finance Minister Wolfgang Schaeuble told the Financial Times this week.
The idea was rejected by U.S. assistant Treasury secretary for international markets and development Marisa Lago at a Senate committee hearing yesterday.