Germany Vs Emerging markets and the UK

With DSK officially announcing his resignation today more voices are putting forward their views as to where his successor should come from.

In the European corner, joining Ireland and Belgium in the doghouse, is Germany. Today a German finance Ministry spokesman said “the ministry points to comments made by the chancellor before the resignation that the next (chief) should be European.” Axel Weber who recently stepped down as president of the Bundesbank is thought to be her preferred choice.

Pressed on the selection process many officials are taking a – it doesn’t have to be a European but…– stance. Take for example John Manuel Barruso, the European Commission president who said as much on CNN yesterday. Citing the current Euro-zone crisis and the fact that European nations are the biggest stakeholders in the Fund; he argues that the Europeans can make a valid claim on the post and furthermore, front a good candidate.

UK Business Secretary Vince Cable want to see the ‘best person’ get the job, naturally. He chose not to comment on reports that former Prime Minister Gordon Brown is still expressing an interest in the role but thinks “promoting national champions, whoever they are, probably isn’t the best way of dealing with this.”

South African finance minister Pravin Gordhan said his country would support a candidate from the developing world. Feeling that “such a candidate will bring a new perspective that will ensure that the interests of all countries, both developed and developing, are fully reflected in the operations and policies of the IMF”. As yet, no candidate has officially been put forward though the leading names are Kemal Dervis and Trevor Manuel.

Word from Mexico, whose central bank governor, Agustin Carstens has been mentioned as a potential candidate is that the “process of selecting the governing body of the fund must be done through an open, transparent process based on the merits of the candidates without regard for nationality”.

As yet there is no definite word on a Chinese nomination though a Chinese central bank advisor, Li Daokui, makes the case for a candidate from a neutral or small country who “would accord more with the interests of the world including China, because big countries such as India and Brazil have too many national interests”.

The bookies who let’s be honest, hold the real balance of power, have Kemal Dervis as odds-on favourite at 5/2. Putting Christine Largarde in 10th place with a rather disappointing 14/2.* Perhaps they know something we don’t?

Never trust the form sheet.

*[Update] WIlliam Hill has been reading a couple of our earlier posts and has revised it’s odds on Christine Lagarde. At the time of writing she’s the front runner on 6/4*

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