March 23, 2006
The European Parliament approved the European Parliament Strategic Review of the IMF Report by a resounding majority of 528 -76 on the 14th March 2006. Whilst the original version of this report was very progressive and called for some quite radical changes of the IMF, the report suffered a series of amendments that weakened it quite substantially in key areas, albeit that some positive elements do still remain.
On Conditionality On the positive side the report does call for more national participation (NGOs and national parliaments) in the definition of conditionality and making national economic choices (para 22). Whilst the report does "acknowledge that the conditions imposed by the IMF have in some cases been too rigid and not always consistent with specific local circumstances" it does qualify by in the need for ‘good use' of funds (para 12). Unfortunately however the report which had originally regretted the ever- increasing number of conditionalities, now effectively says that conditionality is necessary for transparency and good governance (Recital G).
On revising the voting system for more democratic representation
This important paragraph (original paragraph 5) was unfortunately completed deleted. What remains on this issue is a weak recognition of the lack of voice of developing countries in the board, attributed to their lack of votes on the Board and their lack of technical expertise (paragraph 4)
On IMF mandate/ mission creep
One unfortunate loss was the deletion of the call for greater flexibility in the monetary and foreign exchange rate policy of low-income members (paragraph 12) as well as a drastic altering of (paragraph 5) which now approves the IMFs extension of recommendations into the field of social and environmental policies – which it says are dependent upon macro-economic stability. This approval of IMF involvement in this area would seem to be contradictory with the call for a reorientation of the IMF's action towards its core mandate (paragraph 2) as well as more coordination and better division of roles between the IMF, WB and the UN institutions (Recital H). It does also note the overly dominant role that the IMF plays in influencing the strategies of other donors (para 21)
On transparency and parliamentary oversight
There are some positive calls for greater parliamentary oversight and more transparency in the way the IMF does its business, including publication of more extensive minutes from meetings (paragraphs 18, 22, 31)
On debt sustainability
The report still criticises the lack of ‘real sustainability' and lack of MDG focus in the IMF/WB Debt Sustainability Framework (paragraph 27)
On the PRGF
The report now welcomes the PRGF without qualification (paragraph 28). Previously this paragraph had criticised the IMFs rigid economic model and lack of flexibility in macroeconomic frameworks.
Although not as strong as had originally been hoped for, there are still some positive elements to this report that hopefully can be utilised in ongoing efforts to reform the IMF. (Please note that paragraph references refer the paragraphs as they appear in the final approved version, except where stated otherwise).
For the final approved version: Final Resolution
For the original version (for your reference): Report
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