Canada is proposing that non-Europeans should have a veto over the role that the International Monetary Fund can play in providing aid to Europe, Finance Minister Jim Flaherty said today.
“Because of the large number of European seats on the board of the IMF, some of us, and Canada certainly, is of the view that we ought to have two keys, in effect,” Flaherty told reporters in Washington today.
“We would have one vote by the euro zone countries and another vote for approval by the non-euro zone countries” on the issue of aid for Europe, he said.
Flaherty said the IMF has adequate resources to deal with any “imminent situation,” while Europeans need to put more resources into a “firewall” to prevent the region’s crisis from spreading.
Asked if his IMF governance proposal meant that non-Europeans would have a veto on aid for the region, Flaherty said yes, adding he expects an “animated” discussion on the issue at meetings of Group of 20 officials in Washington today and tomorrow.
“Given the major challenge here is a sovereign debt challenge in euro zone countries and the euro zone countries are asking non-euro zone countries to contribute to resources at the IMF, our view is there ought to be two votes,” Flaherty said.
Flaherty also said he’s raised concerns with IMF Managing Director Christine Lagarde about the “troika” system that is being applied by the IMF in Europe, where the agency jointly monitors aid to European countries with the European Union and the European Central Bank.
“That’s not the traditional way the IMF operates,” Flaherty said. “Traditionally, the IMF would direct what needed to be done.”