Strauss-Kahn to close IMF’s Brussels office

Dominique Strauss-Kahn, the former finance minister of France who was recently appointed managing director of the International Monetary Fund (IMF), is planning to close the fund's representative office in Brussels and move it to Paris.

Such a move would be a blow to Brussels's ambition to be the most important focus for economic policymaking in the Union. The IMF, which is based in Washington, is an international financial institution charged with monitoring the global economy. "This move would tend to weaken the influence of Brussels in international economic policymaking," a senior European Commission official said.

He added that Brussels is also where the EU's international aid strategy is developed. The Commission collaborates with the World Bank and the IMF in assessing whether to give budgetary aid to some developing countries. "Moving the IMF's office to France makes no sense," he said.

William Murray, head of the IMF's press office, would not comment on the future of the Brussels office, but European Voice understands that closure is being discussed as part of swingeing cost-saving cuts. The IMF is under pressure from the Group of Seven (G7) leading industrial countries, the IMF's biggest individual shareholders.

In December, Strauss-Kahn announced that, with the organisation facing a $400 million (Û265m) deficit, he planned to save around $100m by reducing staff levels by around 400 (a 15% cut), introducing other cost-saving measures and raising revenue by around $300m a year.

Savings from closing the Brussels office are likely to be small since it is only a two-person outfit. The IMF has 2,800 employees worldwide, mainly based in Washington DC, but Brussels has become an increasingly important listening post for the IMF.

An indication of the importance of Brussels to the IMF has been the frequency of visits by Michael Deppler, head of the IMF's European department, which is also facing staff cuts as part of Strauss-Kahn's economy drive.

The IMF, while continuing its bilateral economic policy discussions with individual EU member states, has been taking a more pan-European view of the region's economy and financial markets, especially towards the eurozone.

Brussels has grown in importance as an economic policymaking arena with the creation of the single currency and the growing efforts led by Charlie McCreevy, the European commissioner for the internal market, to promote deeper financial market integration. The eurozone finance ministers meet regularly in Brussels as the Eurogroup, with Jean-Claude Trichet, the president of the European Central Bank, and Joaqu’n Almunia, the European commissioner for economic and monetary affairs. High-level economic policy officials from the individual member states come to Brussels regularly to prepare these meetings.

Along with Jean-Claude Juncker, the president of the Eurogroup, Almunia and Trichet are the key figures in the intensifying efforts that the EU is making in the field of international economic diplomacy. In addition to Brussels's importance in economic policy, EU trade policy has long been led from Brussels by the Commission's trade department.

One official described Strauss-Kahn's plans as "surprising" and suggested that they might make it more difficult to reach agreement, in the discussions now under way within the IMF membership, on reallocating IMF members' shareholdings. Any restructuring of voting rights in the fund is expected to diminish and concentrate the voting power of the EU members.

The objective of a redistribution of voting power and of the responsibilities of the IMF's executive directors would be to increase the influence of China, India and Brazil to reflect their growing weight in the world economy. Reaching agreement on a single eurozone voice in the IMF is likely to be more difficult if the EU's bilateral relationship with the fund is going to be run from its Paris office.

Dominique Strauss-Kahn, the former finance minister of France who was recently appointed managing director of the International Monetary Fund (IMF), is planning to close the fund's representative office in Brussels and move it to Paris.

• Primary Source

International Monetary Fund: Homepage http://www.imf.org/

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