Barroso wants eurozone represented at IMF

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The European Commission will propose by the end of November a “more consolidated representation” of the eurozone in bodies such as the International Monetary Fund, its President José Manuel Barroso said.

“The crisis continues to show that the euro area needs to speak with one voice in international institutions and international fora,” Barroso said, speaking on Monday night (7 November) at a conference organised by the European People’s Party (EPP).

“The more we improve our internal euro area economic governance, the more pressing is also the need for a strong and efficient external representation of the euro area,” Barroso said, adding that “the Commission will make proposals towards a more consolidated European voice and representation in international fora and institutions such as the IMF”.

Big member states have been traditionally reluctant to give away their seats in international bodies and have thus far prevented any streamlining of the EU or eurozone external representation.

The EU is formally represented in some international forums but has to share its positions with member states such as France and Britain, which maintain their national seats. As a consequence, the eurozone has no formal external representation and participation of eurozone representatives at IMF meetings or G20 summits are decided on an ad hoc basis.

Emboldened by the sovereign debt crisis which was made worse by Europe’s internal divisions, Barroso now feels confident enough to challenge member states on the sensitive issue of external representation.

The prevailing view within the Commission is that external representation should be assigned to the commissioner in charge of economic affairs, a position currently held by a Finn, Olli Rehn.

But this raises questions on how such a position would work out with the position the newly appointed Mr Euro, Herman Van Rompuy.

In any case, Barroso will is expected to formally confirm that the role of the commissioner in charge of economic affairs will be strengthened. The idea circulated in the past weeks that the economic commissioner could take over the chairmanship of the eurogroup seems to have been sidelined by the EU Executive itself “for fear of losing the proposing power,” according to a Commission official.

New package of economic measures

The proposal on external representation of the eurozone will come in the form of a communication and should be presented at the commissioners meeting on 23 November. Together with 'more consolidated' external representation, Barroso will also propose a regulation to link the possibility of getting bailout fund help with economic surveillance of a country’s economy by the Commission.

This is what is currently happening with Italy, for instance, but without a formal legal basis, which the Commission is therefore planning to obtain with the new proposal.

Another regulation, to be presented within the same package, will aim to deepen fiscal surveillance. “For euro area member states in excessive deficit procedure it will set out graduated steps and conditions for monitoring national budgetary policies,” said Barroso.

The package will also include an annual survey on growth with policy suggestions to increase growth and job creation in member states.

Finally, at the end of November the Commission will also publish the long-awaited paper containing options for the launch of Eurobonds, which Barroso renamed stability bonds, and whose details are still unclear.

“Our green paper on euro stability bonds will present the options for the joint issuance of bonds in the euro area, together with further steps of reinforced economic governance that would need to be developed,” Barroso said.

Over the years, the European Commission supported by small member states has tried in different occasions to streamline the EU's representation in international bodies.

Article 138 of the Treaty on the Functioning of the EU (TFEU) envisages the possibility of a “unified representation within the international financial institutions and conferences”.

The treaty reads that:  “In order to secure the euro’s place in the international monetary system, the Council, on a proposal from the Commission, shall adopt a decision establishing common positions on matters of particular interest for economic and monetary union within the competent international financial institutions and conferences”.

Any decision in this direction and for a unified representation should be taken by a qualified majority of the member states which adopted the euro.

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