BRUSSELS (MNI) – The European Commission intends to ask the EU’s 27
member states to merge their presence in international financial
institutions into a single representative, the head of the EU executive
institution’s economics directorate confirmed on Friday.

Although it is unclear whether EU governments would back such a
move, unified EU representation in institutions such as the IMF could
help smooth the way for reforms of the international financial system
aimed at giving emerging economic powers, such as China, a more
proportionate say, while giving the EU, the world’s biggest economic
bloc, a bigger voice.

How much power member states would be prepared to cede to such a
figure is also uncertain. While governments agreed, after lengthy
debates, to the creation of an EU foreign policy representative,
national governments’ foreign ministers have not declined in importance.

“EU institutions have really been forged in the midst of crisis,”
said Marco Buti, head of the Commission’s Directorate for Economic
and Monetary Affairs. “This has been the case in the past and I think
we are in of those moments now. Momentous changes are taking place,” he
said.

The sovereign debt crisis has helped the EU overcome “red lines” in
institutional changes, said the Commission’s most senior economic
bureaucrat. “What we have achieved in the last two years in terms of
economic governance reforms is actually quite extraordinary.”

Warning that the current situation is “not an ordinary crisis” but
a deep one whose “scars in the economic tissue are going to be quite
deep and long-lasting,” Buti said that officials were working “not just
everyday but every moment of the day” to fight the crisis and come
up with longer-term solutions.

The EU needs to install “circuit breakers” to halt the spread of
the crisis and its spillover effects on the financial system and real
economy.

“I think we are going to be in relatively good health in the longer
run, providing we are not dead in the short run,” said Buti.

–Brussels bureau: +32495228374; pkoh@marketnews.com

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