Oops, they did it again: EU leaders push for European head of IMF

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that former MD Dominique Strauss-Khan has resigned, they are taking back every word they said and holding on to their outdated privilege to head the institution that will – whether we like it or not – determine the fate of the world economies.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:

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Europe in denial it is the 21st century?

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.

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Who’s in the dog-house in Europe?

European countries may feel it is their prerogative to name the IMF head, despite repeated promises not to do so. To keep on eye on them, we are going to maintain this handy chart that shows who in Europe is unreformed and still insisting on an outmoded and illegitimate selection process, and who realises that this is the 21st century. Drop us a line if you spot some national media which clarifies the position of those that are unknown.

In the dog house: Ireland and Belgium

In the limelight: United Kingdom

Continue reading “Who’s in the dog-house in Europe?”

IMF power shift may end Europe’s hold on top job

Lesly Wroughton at Reuters

A power shift at the IMF toward emerging nations lays the ground for a fierce battle over who should succeed Dominique Strauss-Kahn and may threaten Europe’s long-standing claim to the top post.

IMF board officials, who spoke on condition of anonymity because of the sensitive nature of the issue, told Reuters there was a push by some countries for a speedy resolution to Strauss-Kahn’s future as head of the organization, although others cautioned against judging him so soon.

Full post here.