European differences with theObama administrationthreatened to overshadow Friday’sG20 summitin Pittsburgh with Britain and France on Thursday resisting US plans to overhaul the International Monetary Fund, the FT has learnt.
The UK and France publicly support the reweighting of the IMF’s shareholding structure to give a greater voice to the larger developing countries, including China and India, but not at the expense of their permanent board seats.
The sweep of the US proposal took Britain and France by surprise. In response they have argued that all issues about the reform of the institution should be on the table, including whether the US should retain itsde factoveto at the IMF.
White House officials declined to comment, with one European official saying the US had decided not to press the matter further in Pittsburgh. But the dispute added to the growing sense of irritation between the major European countries and the Obama administration.
Angela Merkel, Germany’s chancellor, who faces a general election on Sunday, said the fight against global economic imbalances should not become the central issue at the summit – in contradiction of Barack Obama’s stated objectives.
Speaking in Berlin before boarding her flight, Ms Merkel came close to accusing the US and Britain of backtracking on financial market regulation and global limits on bankers’ bonuses by shining the spotlight on the export-oriented economic policies of Germany and China.
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