France’s finance minister said that the post-war global monetary order required to be reinvented or become increasingly dominated by China.
Since its founding at the Bretton Woods Conference in New Hampshire in July 1944, the pillars of that order, the International Monetary Fund and its sister institution the World Bank, have been governed by the United States and Europe.
But globalization, the increasing populist backlash against it, and the rise of large new financial powers like China are increasingly putting this order to the test.
French Finance Minister Bruno Le Maire told a conference at the French central bank to mark the conference’s 75th anniversary stated that the Bretton Woods order as we know it has reached its limits,”
He added that the option they now have is evident–either we reinvent Bretton Woods or it risks losing significance and ultimately disappearing.
Le Maire said that while Bretton Woods described the global financial order of the second half of the 20th century, China’s New Silk Road project may define the first portion of this century.
The Belt and Road Initiative, as it is formally called, envisions rebuilding the old Silk Road to connect China with Asia, Europe and beyond with massive infrastructure spending largely financed by China.
MF Acting Managing Director David Lipton said at the meeting that the fund had a obligation to reflect emerging markets ‘ increasing authority.
Le Maire said Bretton Woods institutions ‘ reform priorities should focus on combating climate change, curbing increasing inequalities, and regulating the development of digital giants.
He added that the advent of a fresh IMF chief after Christine Lagarde’s departure for the European Central Bank created an chance to rethink the mandate of the fund while its shareholders required to guarantee that it had sufficient resources for the next crisis.