FRANKFURT (AFX) - German finance minister Peer Steinbrueck said there is some hope for reaching agreement on the reform of the International Monetary Fund following new proposals from Canadian delegates at the G7 meeting of finance minister and central bank chiefs.
There are still widely diverging views among the G7 nations about how to tackle IMF reform, Steinbrueck said at a press conference after the meeting.
But he said Canadian officials had brought 'some glimpse of hope' to the debate when they proposed to discuss a 'package' of reforms.
Under the proposal, the IMF countries would agree to a bundle of reforms that would address not only the fiercely debated quotas but also other issues, Steinbrueck said.
The Canadians believe this approach may find broader agreement, the minister added.
In its communique, the G7 reaffirmed the 'strong belief' that fundamental reform is necessary for the IMF to maintain its credibility and effectiveness in the changing global economy.
'We remain committed to making IMF quota shares more aligned with members' relative weight and role in the world economy, and to enhance the participation and voice of low-income countries,' it said.
The G7 ministers stressed the importance of improving IMF surveillance, arguing that surveillance must be applied 'equally and even-handedly, focused on external stability and be subject to a clear accountability framework, without creating new obligations'.
They said they welcomed IMF managing director Rodrigo Rato's proposals to update the 1977 Decision on Surveillance over Exchange Rate Policies. They also said they would 'take note' of the IMF's report on the long-term financing of the fund, which was described as a 'good basis for further discussion'.
They also support the recently-launched reform of the governance of the World Bank.
During its 2006 joint annual meeting in Singapore, the IMF and World Bank governors decided to revise the quota formula in time for the 2008 spring meeting, to modify the quotas in favour of a large group of under-represented countries in time for the 2008 annual meeting, and to increase the basic votes.
The objective is a more simple quota formula which, next to gross domestic product (GDP), also recognises the degree of openness as an important component. newsdesk@afxnews.com jfb/pp COPYRIGHT Copyright AFX News Limited 2006. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited