DAVOS, Switzerland -(Dow Jones)- European Union countries are willing to accept a reduced share of the International Monetary Fund's voting rights, giving more power to emerging market economies, said Managing Director Dominique Strauss-Kahn.
"The E.U. countries know that their share of the voting power will be reduced," Strauss-Kahn told Dow Jones Newswires on the sidelines of the World Economic Forum in Davos, Switzerland.
Strauss-Kahn, who assumed his post in November, noted that a new method for calculating countries' voting rights still needs to be resolved. Current IMF voting powers are apportioned based on a complex formula incorporating a country's gross domestic product, foreign currency reserves, the openness of its economy and the variability of its current account receipts.
IMF reform has been a key concern among emerging market countries, which claim they should have more influence over an institution that provides them crucial financial and technical assistance.
IMF voting power also has been a contentious issue in Europe, with some policymakers in France, Italy and other states worried about losing their influence. Euro-zone countries also are debating whether they should have a single, unified voice at the IMF.
The IMF's member countries agreed to change the fund's voting system at a meeting in Singapore in 2006. Voting rights for China, South Korea, Mexico and Turkey were raised at that time and a two-year deadline was set to reform the entire quota system, giving more power to other emerging economies.
Strauss-Kahn said most E.U. states will end up with reduced voting powers. Ireland and Spain, which have experienced rapid economic growth in recent years, are exceptions in that group.
