New Perspectives on EU-IMF Relations: a Step to Strengthen the EMU External Governance

Abstract

After many years of inactivity, the time has come to activate the external side of the EMU and surpass the time of pragmatic arrangements applied until now to the EU-IMF relationship. The economic crisis and the subsequent sovereign debt crisis in Europe have forced more transfers of competences from the EU countries to the EU institutions in the economic policy field, and this new dynamic in the European integration process provides a strong rationale for the EU and Euro area to reassess the external representation of the EU on EMU issues, including the participation in international institutions and fora and, in particular, in the IMF. Moreover, the implementation of the 2010 IMF reform after the US congressional approval will eliminate legal obstacles to a consolidation of the EU Member States’ constituencies in the IMF. To develop Art. 138 TFEU, the European Commission presented a proposal to enhance the Euro area representation in the IMF in October 2015. After a reshuffling of the current IMF constituencies with Euro area Member States, the proposal advocates EU mixed representation in the IMF (EU and their Member States) with a single chair for the Euro area in the IMF Executive Board from 2025.