Belgium: The euro currency’s growing weight needs a greater say at key talks on the global economy, Joaquin Almunia, EU economic and monetary affairs commissioner said.
He suggested that a single euro area chair at international fora should no longer be just a long-term objective, adding that the world was moving faster and that there was an acute need to reconsider timetables.
“Clearly, as the issuer of the world’s second largest currency, the euro area cannot afford to stand back from international economic and monetary affairs,” he said.
The euro is now shared by 15 European nations, including heavyweights Germany and France but they do not always pull together when they take their seats for talks with major trade partners at the G-7 group of industrialized nations or the International Monetary Fund.
As a first step, Almunia said euro finance ministers needed to coordinate far more so they could speak with one voice with the rest of the world. He did not elaborate on how this would be done, saying he would come out with more specific proposals in May.
His words come as new economic powerhouses China, India and Brazil become more involved in world trade and economy talks.
India and Brazil last year joined the United States and the European Union in crunch talks to try to reach a World Trade Organization breakthrough while European and American officials traveled recently to Beijing to ask China to do more to tackle its ballooning trade deficit and low-value exchange rate.
But important talking shops for the world economy, namely the G-7 and the IMF largely reflect the balance of global power immediately after the Second World War, some 60 years ago.
The core group of G-7 which also meets annually with Russia as the G-8 is made up of the US, France, Germany, Britain, Italy, Japan and Canada.
Three of those countries who share the euro include Germany, France and Italy. Add Britain and four of them are part of the EU.
Almunia did not touch on whether some or all of these should give up their seats in favor of a euro chair, a move not likely to go down well in any European capital that sees itself as a major world player.
For the IMF, there were signs of change last year as it picked France’s Dominique Strauss-Kahn with many voices, even in Europe questioning the tradition of Europe picking the boss of the IMF while the U.S. chooses the head of the World Bank.
The Fund has increased voting weights for some fast-growing economies but there is still some pressure to see more reform as it tries to reach out to Latin America and Asia where many countries are wary after bowing to harsh IMF policies during the financial crises of the 1990s.