Pressure on IMF to appoint a European as head

Senior European politicians have called for a European candidate to replace Christine Lagarde as head of the International Monetary Fund (IMF), with the Netherlands launching a bid to fill the post. The position will become vacant in October, with Lagarde, the current managing director, set to start as the next head of the European Central Bank (ECB) the following month.
“For Spain, and I think for all European Union countries, the priority is that the director general will continue to be a European,” said Spanish finance minister Nadia Calvino. French Finance Minister Bruno Le Maire also called for a European successor to Lagarde, and said the subject would be discussed informally by Eurozone finance ministers. Dutchman Jeroen Dijsselbloem, former president of the Eurogroup of finance ministers, has been slated as a potential candidate.
Asked about Dijsselbloem, who is the only Dutchman in contention, Finance Minister Wopke Hoekstra said: “The Netherlands has some excellent candidates.” All 11 IMF bosses have come from Europe, although emerging economies have challenged this practice.
Among the names that have arisen to head the IMF is of the current Governor of the Bank of England, (BoE), Mark Carney, although he refused to be drawn on whether he is eyeing the top job but did not deny wanting the role. “There will come a time when that (IMF) process launches and that’s probably the right time to answer that question.” Carney said.
The statement left open a bid for the job at the helm of the IMF, a powerful global institution which acts as a lender of last resort to countries with problem debt. Carney, speaking recently at a press conference for the BoE’s Financial Stability Report, said there were “a few orderly transitions” he had to look after (in his present position) before he looked elsewhere.
“One of them is an orderly transition through 31 October” — the date Britain is scheduled to leave the EU — Carney said. He said the other was a smooth handover to his successor when he leaves his post in January. Former French foreign minister Lagarde was chosen by European Union member states at the start of this month to replace Mario Draghi at the ECB, as the Italian’s eight-year term draws to a close. He is also in the frame for the IMF position.
If Carney wishes to fill Lagarde’s shoes at the IMF, he will have to fight off former UK chancellor George Osborne, who appointed him to the BoE. Betting firm Betway said the Evening Standard editor (Osborne’s current job) is the favourite for the role at odds of 5/2, after friends of Osborne briefed media he fancied the job. As an ambitious person, Osborne is likely to try hard for the position which has a much higher profile than that of an — free of charge — evening newspaper editor.
Moreover, the management of the newspaper may take a dim view of such a blatant pitch for another job after surprisingly taking over the editor’s office with no professional journalism experience to speak of.
Second in the running is Raghuram Rajan, former governor of the Reserve Bank of India, at odds of 5/1 from Betway. Rajan’s appointment would be a break from tradition, however, which dictates that the fund is always led by a European, while its sister institution the World Bank is run by an American.
The EU recently backed this unwritten rule, saying that a European take the IMF job was a “priority”. Currently third on Betway’s list at odds of 11/2, Carney would qualify under the rule as he holds Irish and British citizenship, despite being the first Canadian to govern the BoE.
The appointment of Lagarde at the ECB is seen as a victory for the French president Emmanuel Macron. The impression is that he made a clever move for the appointment of a person that he wanted in that position. At first, he was raging to the media about the shoddy state of EU decision making and then a couple of days later he was patting himself on the back.
Macron pushed Ursula von der Leyen as a compromise candidate for European Commission president, simultaneously helping Angela Merkel and dampening persistent rumours of a growing rift between France and Germany. This canny move also allowed his ultimate desire: a French head of the ECB. Critics of the decision to appoint Lagarde point to — among other issues — her lack of experience in central banking and the fact that she is not an economist.
(The author is our foreign correspondent based in the UK. He can be reached at andyjalil@aol.com)