Research Papers

The IMF’s heavy lending involvement in advanced EU economies since 2008 has put a spotlight on how the EU governs its relations with the Fund. Procedural coordination among EU members at the IMF has increased since the introduction of a common currency, and the crisis has expanded the breadth of topics that are now being coordinated among EU countries. Yet, European coordination is still mostly done on an ad hoc and voluntary basis. The paper aims to explain the governance patterns of the EU’s relations with the IMF. Existing scholarly accounts see the governance of the EU’s external macroeconomic relations mainly as a result of internal EMU competences, institutions or preferences (e.g., Moravcsik 1998; Meunier and McNamara 2002; Frieden 2004). Yet the paper argues, first, that the legal-institutional framework underpinning EMU is inconclusive and does not provide enough “script” to govern its external relations. Moreover, second-image explanations based on member states’ preference heterogeneity cannot explain why preferences on international macroeconomic issues should systematically differ from preferences on European macroeconomics or trade policy - where we see more coordination or indeed joint representation. The paper therefore proposes to bring the international institutional set-up into the explanation: The IMF’s country principle and the system of “mixed constituency” play a vital role in dissuading EU members from coordinating more formally at the Fund. It reinforces member states’ statecraft - at the expense of a common European position.