Today Lagarde meets with the IMF board following meetings with IMF officials and US Treasury Secretary Timothy Geithner yesterday. Although still a long-shot, Carstens may be buoyed somewhat by the news that Brazil may back him after all. Paulo Nogueira-Batista, Brazil’s executive director at the Fund was quoted as saying “Brazil may well decide to support Carstens”. More symbolic than anything (their chair commands 2.79% of the vote) it at least shows a willingness to express their grievances at the process with deeds as well as words and saves Carstens the embarrassment of not having the support of leaders from his own region. Nogueira-Batista continues, “this institution has a long way to go in undoing problematic governance structures … this [campaign] process has helped somewhat by highlighting the weaknesses”.
Domenico Lombardi, a former IMF board member pointed to the dilemma faced by many nations in voting for anyone else but Lagarde, saying that “in the end this person is going to be the managing director of the institution. There is really no sense in voting for somebody else when it’s clear who will win”.
Still looming is the French courts’ decision on whether to pursue legal action against Lagarde for accusations of abuse of office over a settlement between businessman Bernard Tapie and the French government. Recent reports suggest that an official under her ministry’s authority is too under investigation.
The IMF board will meet on June 28 to discuss the candidates, announcing the victor by June 30.
A lot of developments have been taking place in the race to head the IMF. First lets admonish Poland for deciding to sleep in the dog-house along with the rest of Europe. Polish Finance Minister Jacek Rostowski said about Lagarde on Wednesday: “This is a very good candidacy, it’s hard to imagine a better candidacy and it has the backing of the Polish government.” Never mind that we don’t yet know what the other candidacies will be.
Korea was at least a little better than that. South Korea’s finance minister Yoon Jeung-hyun gave an interview to the Financial Times, and they wrote: “Seoul could not announce its final preference until after June 10, the candidates’ deadline. He said he remained keen to see whether an equally strong candidate to replace Dominique Strauss-Kahn would emerge from a developing nation.” That is more principled than the UK, but Yoon did call Lagarde “a very strong candidate and has the qualities needed to be a good managing director”.
Continue reading “Poland in the dog-house, Korea and US wavering; Waiting for India…”
The US Treasury just released a rather cryptic statement. It fails to fully endorse the same language that the IMF used 2009. In 2009 the agreement was “an open, merit-based and transparent process for the selection”. Even that was a compromise since it left out the key phrase that developing countries wanted: “without regard to nationality”
The US statement reads:
“We want to see an open process that leads to a prompt succession for the Fund’s new Managing Director.”
The call for a prompt replacement will make it more likely the Europeans stitch up the process. And with no reference to transparency or “merit-based”, it looks like Geithner is waffling!
Continue reading “Cryptic US position just released”