October 22, 2020

Europeans Focus on Retaining Leadership of I.M.F.

Ms. Lagarde’s candidacy gained momentum after the British   chancellor of the Exchequer,  George Osborne, backed her Saturday over the former prime minister, Gordon Brown, effectively ending Mr. Brown’s bid for the post.

Calling Ms. Lagarde an “outstanding” choice, Mr. Osborne said he thought it would be “a very good thing to see the first female managing director of the I.M.F. in its 60-year history.”

Following endorsements by Germany, Italy and other European countries, Mr. Osborne’s decision thrust Ms. Lagarde to the forefront of Europe’s efforts to keep a European in a post the Continent has held for more than 40 years.

The job, one of the most prestigious among multinational institutions, is up for grabs since Mr. Strauss-Kahn resigned last week to fight charges that he sexually assaulted a maid in a New York hotel May 14. Ms. Lagarde is widely respected in the world of international finance, although she is facing some scrutiny in France over allegations that she may have overstepped her authority in two cases during her early days as finance minister.

No European leaders have raised similar concerns. But other countries are taking a dark view of the aggressive European push.

Australia and South Africa issued an unusual joint statement Sunday criticizing a long-standing arrangement between Europe and the United States in which a European typically heads the I.M.F. and an American leads the World Bank.

“In order to maintain trust, credibility and legitimacy,” the statement said, “there must be an open and transparent selection process which results in the most competent person being appointed as managing director, regardless of their nationality.”

Leaders of Brazil, Mexico, China and other fast-growing emerging markets want a more open process that could see an official from one of their countries appointed to the position for the first time. These economies are gaining influence in the world as debt crises and economic downturns plague Western economies. Unlike Europe, however, the emerging-market countries are not speaking with a unified voice or throwing their weight behind a main candidate.

Names mentioned over the weekend included Agustín Carstens, central bank governor in Mexico; Montek Singh Ahluwalia, the deputy chairman of the planning commission in India;  a former finance minister of South Africa, Trevor Manuel; and Leszek Balcerowicz, who helped oversee Poland’s transition to a free market economy from communism.

Kemal Dervis, a former finance minister of Turkey whose name was widely circulated last week, took himself out of the running Friday.

President Barack Obama, Chancellor Angela Merkel of Germany and other leaders of the Group of 8 industrialized economies are expected to consider the issue when they gather this week in Deauville, France, to discuss major political and economic issues.

The I.M.F. wants to pick a new leader by June 30, a rapid timetable that would help get the organization back on track to deal with a growing debt crisis in Europe. Fears are mounting that another meltdown in Greece may be unavoidable and could ricochet through other troubled European countries.

Since Greece received its €110 billion, or $156 billion, bailout, the country has been unable to resolve its financial crisis, sending European leaders and the I.M.F. scrambling for a way to keep Greece from default.

On Friday, Ms. Lagarde suggested that France could support a rescheduling of Greece’s debts if banks that owned the debt agreed to extend the amount of time for repayment, an apparent shift in position that aligns France and Germany against the European Central Bank, which opposes any restructuring of Greece’s debt.

Article source: http://www.nytimes.com/2011/05/23/business/global/23imf.html?partner=rss&emc=rss

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