G7 can't agree on IMF boss

Doug Henwood dhenwood at panix.com
Sat Jan 22 13:02:33 PST 2000

Reuters - January 22 2:45 PM ET

Consensus on IMF Chief Evades G7 in Tokyo By Linda Sieg

TOKYO (Reuters) - Consensus over who should be the next head of the International Monetary Fund eluded the Group of Seven (G7) rich nations on Saturday, but Germany still hopes to gain backing for its candidate despite U.S. and French doubts.

Comments by U.S. Treasury Secretary Lawrence Summers, however, suggested Berlin could face an uphill battle to persuade Washington to change its lukewarm view of German Deputy Finance Minister Caio Koch-Weser, even if France decided to lend support.

Summers and other G7 ministers said after half-day talks here on the global economy that no conclusions had been reached in informal chats on a successor to outgoing IMF Managing Director Michel Camdessus and some observers are betting that his deputy, Stanley Fischer, will have to take the helm as an interim chief.

Europe insists on keeping its grip on the top IMF post, which Camdessus will vacate in February after holding it for 13 years.

``For the time being, we have to consider that maintaining a European in the job ought to be the normal situation,'' European Union monetary affairs commissioner Pedro Solbes told Reuters.

Japan has put forward former top financial diplomat, Eisuke Sakakibara, and won support from many Asian nations who want a greater say in the global body's policies.

But even Sakakibara -- an outspoken critic of the IMF's handling of the 1997 Asian financial crisis -- admits his chances are slim at best. Instead, Japan is mainly serving notice that the position will not remain a European preserve forever.

By convention, Western Europe gets the top spot at the IMF while the United States chooses the head of the World Bank.

Germany Hopes For French Backing

Europe has been as unable to reach consensus on a candidate as it has been keen to keep the key global job.

But German Finance Minister Hans Eichel said on Saturday he was hoping Berlin would ``get lucky'' and win French support at an informal meeting of German Chancellor Gerhard Schroeder and French Prime Minister Lionel Jospin in Paris later on Saturday.

Europe would like to agree on a candidate in time for a meeting of EU finance ministers on January 31.

Germany was first out of the post in proposing Koch-Weser, a former World Bank official. Recently he has received support from several EU member nations despite earlier criticism that he did not have the stature to fill the high profile position.

France, which has occupied the post for more than 30 years since the IMF's post-war creation, has hung back, hinting that the German candidate does not make the grade.

On Saturday, French Finance Minister Christian Sautter said Paris had no official candidate of its own but that he was sure a European candidate with a ``high level of competence'' would be found.

Other names floated for the position include British Finance Minister Gordon Brown, Bank of England Deputy Governor Mervyn King, head of the Bank of International Settlements Andrew Crockett as well as former finance minister Kenneth Clark.


Internal European machinations aside, a U.S. veto may still be the biggest stumbling block to a successful German campaign.

U.S. officials are said to view Koch-Weser as too lightweight for the job and his World Bank credentials as inappropriate given their desire to focus the IMF on crisis management rather than on development issues that are the usual domain of the World Bank.

Summers declined to comment on specific candidates, but stressed the choice must be acceptable to all IMF shareholders, of which the United States is the biggest.

``I think it is to be hoped that there will emerge a consensus candidate who is satisfactory to a wide range of countries and who has the necessary attributes,'' Summers said.

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