Since the US is by far the largest shareholder in the IMF, ratification by the States is necessary
This year, the US Congress will not ratify a reform bill that would give emerging states more power in the International Monetary Fund, a project voted in 2010 by the International Institute, but which cannot enter into force without the approval of US Parliamentarians, stated AFP and Reuters.
The Finance Act, presented on Tuesday evening in the parliamentary committees and which will be put to vote in Congress in the coming days, does not contain the articles which would have allowed the ratification of the reform. This was the last chance for the partisans, because the Congress is to enter the holidays at the end of this week.
The IMF Director, Christine Lagarde, has since October asked the Congress to adopt the reform supported by the Obama Administration, but which does not enjoy the support of the Republicans. The Republicans are set to control both houses of Congress since January 2015. Since the US is by far the largest shareholder of the IMF, ratification by the States is essential in order to get the support of 85% of the voting members.
The reform will double the institution’s financial resources and will give a greater voting power to emerging economies such as China, Russia, India and South Africa. Furthermore, it would review the IMF board composition in order to reduce Western Europe’s domination.