IMF reasserts itself, finds a place in Europe
During the 1980s, the International Monetary Fund demonstrated its greatest impact tackling the debt crisis in Latin America. In the 1990s, its energy was focused on repairing and rebuilding Eastern European nations, who were struggling to emerge from decades under communism. Today, the Brookings Institution says, its priority is to “stabilize a systemic region, the EU, whose size dwarfs the institution’s meager resources.”
The import and challenge of this task has also had an impact on the role the IMF will play, particularly with regard to its relations with the G-20 nations. It also has the potential to change the governance structure of the Fund.
“The role of the IMF in the G-20-led process highlights a further governance challenge. As in the case of the G-7, the Fund continues to enjoy an advisory function. However, its advisory role is more clearly spelled out and is also far more strategic, given the greater number of countries in the G-20. Even so, how the advisory role relates to the Fund’s fulfillment of its mandated critical tasks is not at all evident, as witnessed, for example, by the US proposal to grant authority to the G-20 – not the IMF – on the issue of China’s exchange rate.,” argues Brookings fellow Domenico Lombardi.