Time and again European Union leaders have made overbearing political commitments to conduct an “open, transparent and merit-based process” to select the IMF Managing Director (MD). However, at the moment of truth now that former MD Dominique Strauss-Khan has resigned, they are taking back every word they said and holding on to their outdated privilege to head the institution that will – whether we like it or not – determine the fate of the world economies.
The selection process of the new IMF head has managed to achieve what three long years of deep financial and economic crisis in Europe never managed to do: to reach agreement among Member States of the European Union. This week “a European consensus is being elaborated. We must have a European [IMF managing director],” said French Minister Francois Baroin. Even “the Chinese are favorable to the appointment of Christine Lagarde [current French Finance Minister],” he added.
Both amnesia and backtracking are common features amongst European decision-makers regarding IMF governance. Let’s remind them what they promised to deliver:
In November 2008, ahead of the International Conference on Financing for Development in Doha, European leaders expressed their “support (for) an open and transparent selection process of the IMF Managing Director and the WB President and the simultaneous opening of these positions to candidates from all board members.”
In May 2009, in a speech on “European foreign economic policy”, the European Commissioner Joaquin Almunia said that the situation at the IMF was “becoming more and more untenable.” And he added: “It is now time to face up to the reality and to find a solution which would be acceptable to member states before a solution to the problem is forced upon us.”
In June 2010, European leaders agreed in the Council Conclusions that IMF “quotas should be reviewed as part of a wider package of IMF governance issues, covering all elements agreed in Pittsburgh,” including the selection of leaders of all international institutions through an open, transparent and merit-based process.
In April 2011, on the occasion of the Spring meetings of the IMF, György Matolcsy – Chairman of the EU Council of Economic and Finance Ministers – reiterated that “the criteria and the procedure for the selection process of the IMF Managing Director should be part of a broader (…), and that the election should follow an open, transparent and merit-based process, irrespective of nationality and gender.”
Faced with the moment of truth, European leaders are – once again – desperately clinging to the top position at the IMF.
In Europe we must ask ourselves how our leaders, who have failed to put their own house in order, will manage to provide leadership at the institution which is ever more shaping the future of global economic and financial governance.