The Plenary of the Parliament voted to ratify Decision No. 79-1 of the Board of Governors of the International Monetary Fund on the Sixteenth General Review of the Participation Shares and the Schedule for the Reduction of New Lending Facilities.
As stressed during his presentation by the Deputy Minister of National Economy and Finance, Christos Dimas, in the Plenary Session of the Parliament, "the credibility and prestige of our country is enhanced through the strengthening of its participation in a major international financial institution (IMF), which is the lender of last resort in cases of serious fiscal imbalances or imbalances in their balance of payments."
The law involves increasing the participation shares, or quota increase, of all 190 IMF member countries by 50%, in proportion to their participation in the Fund's capital, and reducing the amount of New Arrangements to Borrow (NAB Rollback).
The total amount of IMF participation shares will be 715.7 billion SDRs (USD 960 billion), an increase of 238.6 billion SDRs or USD 320 billion, with a reduction in New Arrangements to Borrow from 364 billion SDRs (USD 485 billion) to 303 billion SDRs (USD 404 billion) accompanying this increase.
With regard to our country, the above decisions imply an increase in our participation share from 2.4 billion SDR SDRs (USD 3.2 billion) to 3.6 billion SDRs (USD 4.9 billion) and a reduction in the amount of new borrowing facilities from SDR 1.7 billion (USD 2.2 billion) to SDR 1.4 billion (USD 1.9 billion).
THE GAINS
What Greece gains by increasing its participation share:
IMF participation shares not only serve the role of the capital that each member owes to the Fund but are also linked to other important functions, namely:
- They determine the number of votes each member is entitled to in the Fund's decision-making processes.
- They determine the amount of assistance a country can receive from the Fund.
They determine the share of each country in case the Fund proceeds to a general SDR allocation, as, moreover, had happened in August 2021, when our country received from the IMF about US$3 billion out of the total IMF allocation of US$650 billion.
Based on the above, Greece has every reason to increase its share of IMF participation in absolute terms while maintaining its share of the Fund. Additionally, when the voting process on the IMF's proposal to increase the IMF's participation shares was complete on December 15, 2023, all Fund members representing 92.86% of the total voting power voted in favor of the proposal, indicating that there was consensus on the aforementioned issue.
The increase in IMF Participation Shares, combined with the reduction in New Credit Facilities, will maintain the IMF's lending capacity at SDR 696 billion while reducing the Fund's reliance on lending resources, restoring the primary role of quotas in the Fund's lending capacity, and strengthening the IMF's role at the center of the Global Financial Safety Net. It will also strengthen the IMF's capacity to help safeguard global financial stability and respond to the contingent needs of its members in an uncertain and shock-prone world.
In his introduction, Deputy Minister of Economy and Finance Christos Dimas said: "Greece's participation in the increase in participation shares while reducing New Lending Facilities further strengthens our country's presence in one of the most powerful international financial institutions, such as the International Monetary Fund, while marking Greece's transition from the borrower's side to the creditor's side."
