A bad day for small Europeans
An update on my last post - the communique did contain that "high level aspiration" on IMF reform after all.
After a long battle by the US - the leaders agreed to use the 5% figure in relation to reform. But note the careful language: the leaders committed a shift in votes "of at least 5% from over-represented countries to over-represented countries".
So the big European countries aren't necessarily going to lose their permanent seats on the IMF Executive Board. In fact, I'd be amazed if they did.
Most officials I spoke to said the deal was unlikely to be struck by the January 2010 deadline: it's going to be a nightmare to agree.
But we can say right now that it will be a bad time to be small and European.
With just under 5% of votes, the likes of Britain can claim they are not really that over-represented at the Fund - and believe me they have chapter and verse on this for anyone who disagrees. Even though it's obvious that China should have more. It now has 3.6% of votes, for more than a billion people and the second largest economy in the world.
But Belgium has 2% of votes - for a population of 10 million. The Netherlands has 2.6%. The list goes on. It's hard to believe their share will survive the final cut.
Apparently Gordon Brown has a cunning plan that will fix all this and leave everyone happy. It will be interesting to see how that works out.