It seems Europe is in denial it is the 21st century and that they no longer have the power to decide things for the world. One of the best pieces of the day is from Raghuram Rajan, formerly the chief economist at the IMF, who agrees with the NGO position that we need to have someone independent of the political powers that be in major economies.
… someone whose primary skill is political would be an unwise choice. … Perhaps the biggest risk of all is to have someone heading the fund whose political ambitions are still alive. Here there is a real danger that decisions made by someone with substantial influence over nearly a trillion dollars of funding will be made with a view to establishing an electable record in his or her home country.”
That analysis, as argued by more than 20 NGOs a month ago would disqualify candidates like Christine Lagarde, finance minister of France or Augustin Carstens, former finance minister and now central bank governor of Mexico.
An excellent piece (in Spanish) by a fellow campaigner in Latin America exposes the continued imbalance in voting rights at the Fund that may enable Europe to dictate a choice despite promises not to. The author, Roberto Bissio, notes that European countries are now the debtors and that putting one of them in charge of the Fund would be “putting the fox in charge of the henhouse.”
Thalif Deen at InterPress Service has a good piece punching also holes in the European arguments for heading the Fund. He notes the massive conflicts of interest involved, including: “the rescue packages for Europe are turning out to be efforts to protect the interests of the French and German banks, who are the major creditors, as bondholders, of Greece, Spain, and Portugal”.
The Lex column in the Financial Times also thought a non-European would be good for the job: “a non-European would not only make the IMF more global; he or she might be just what the eurozone needs. The currency bloc has enough resources and has had enough time to deal with the problems of its weaker members – without any more prodding and coddling from the IMF.”
Will European politicians finally pull their heads out of the sand and realise the time for change, as they already promised, has come? We’ll round-up who is in the doghouse again later today.