The U.S. Treasury Secretary Jacob Lew on Wednesday urged the U.S. congress to ratify the much- delayed quota and governance reform package agreed by the International Monetary Fund (IMF) governors in 2010.
"At a time when the United States is at the forefront of international calls in urging the Fund to play a central and active first responder role in Ukraine, it is imperative we secure passage of IMF legislation now so that the IMF can provide the most effective assistance to Ukraine in this vulnerable moment and we can preserve our influential voice in this indispensable institution," Lew said in his testimony before the Senate Budget Committee.
Lew said Ukraine may seek a rescue package of as much as 15 billion U.S. dollars from the IMF. "That's why the IMF is so important. It is the first responder."
The IMF's Board of Governors approved a quota and governance reform package on Dec. 15, 2010. The package included a doubling of IMF quotas and a shift in quotas to dynamic emerging markets and under-represented countries, and a proposed amendment to reform the executive board that would facilitate a move to a more representative and all-elected executive board. The reforms would give the emerging economies more say in the 188-member global lender.
The IMF previously had intended to make the 2010 reform package effective before October 2012, but Congress of the United States, the Fund's largest shareholder, has become the major stumbling block for the reform.
The United States holds 16.7 percent voting shares, which gives it the veto power to the reform package that needs 85 percent voting shares to take effect.
Lew said the refusal to approve the previously negotiated IMF reforms weakens the U.S. voice in this institution. "We're already hearing calls by some to say, 'if the United States doesn't approve (the IMF) reforms, we should maybe move on without them,'" Lew told the Senate lawmakers. "That's not a good place for the United States to be."