UPDATE 2-EU not ready for single seat at IMF - Barroso

By Marcin Grajewski BRUSSELS, July 6 (Reuters) - The European Union is not yet ready to have a single representation at international financial institutions despite being increasingly willing to speak with one voice, the chief of the bloc's executive arm said on Monday. "Are they ready for a single representation of the European Union? Honestly I don't think so," European Commission President Jose Manuel Barroso told a news conference ahead of a July 8-10 summit of leaders from the Group of Eight major countries. "Are they ready to have more coherent representation in those fora? I think probably yes," he added. He was responding to a question on whether the 27-nation EU should have a single seat at the International Monetary Fund. Euro zone finance ministers are to discuss the issue late on Monday.

Member states are reluctant to abandon their national seats at the IMF board and other forums such as the Group of Seven industrial countries, or the G8, which also includes Russia. EU countries also face pressure to lower their representation at the IMF to make more room for China and other emerging economies, which are playing an increasingly important role in financing the Fund. Barroso reiterated the European Commission's view that the euro zone and the EU would not return after the crisis to their potential growth, or the highest expansion sustainable over the long term. The EU should post modest growth in 2010, he added. That topic is also due to be discussed at the Eurogroup meeting, which starts at 5:00 p.m. (1500 GMT). "We are not yet out of the crisis. We are no longer in free-fall, but we are still in negative territory until the end of this year," he said. Barroso repeated calls for exit strategies from governments' fiscal stimulus programmes. "I think the solution is not to go on forever with expansionary policies ... The solution is to come back as soon as possible to normal public finances," he said. Responding to suggestions, notably by China, that the world might require more reserve currencies than the U.S. dollar, Barroso said a number of stable currencies were needed to provide financial stability. He said the current debate should not be about whether to back or oppose the dollar as the main reserve currency. "The most important thing is to have an important number of important stable currencies that give ... stability to the world financial order," he said. (Additional reporting by Bate Felix; Editing by Dale Hudson/Victoria Main) Keywords: IMF EU/BARROSO ([e-mail]; [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.