SCHRÖDER HAILS IMF BALLOT, CLINTON URGES NEW EU CANDIDATE.
Germany said today that it would discuss with its EU partners what to do next after its candidate to head the IMF, Caio Koch-Weser, failed to secure a majority in an straw poll yesterday, Reuters reports. In a statement published late yesterday, German chancellor Gerhard Schröder said the informal vote by the IMF executive board could pave the way for a "consensus result with the US and Japan," hailing the selection as a sign of "European solidarity," Agence France-Presse notes. U.S. officials, by contrast, viewed the vote "as vindication of their long-stated position that Koch-Weser commands respect in only one part of the world [i.e., Europe.]," the Washington Post notes (p.E9).
Koch-Weser received 43 percent of votes from executive board members, the New York Times reports (p.C1). The informal vote does not confirm Koch-Weser as IMF managing director, however, as it was taken simply to give the 24-member executive board an initial assessment of the three candidates for the post. Interim IMF chief Stanley Fischer came in second (12 percent), while in third place was former Japanese finance minister Eisuke Sakakibara (9 percent). But countries representing 36 percent of the votes at the international lender, including the US, abstained, Reuters reports. "On the basis of the poll, (IMF) executive directors will continue their consultations with each other and their national authorities on the next steps," AFP notes an IMF statement said, adding that no decision had been made on a further poll.
"Europe has underlined its determination to fill the post...and has obtained a lot of support from the Third World and emerging nations," Schröder said further. The outcome of the straw poll was "the result of European solidarity and capacity for action." The German government stood by Koch-Weser as its choice, notes AFP. "Germany has proposed a candidate and he's the right one," a government spokesman said in Berlin.
Meanwhile, the LA Times (p.C1) said the German bid was on the "verge of collapse, . . .shrouding the leadership of the global lender in doubt." Ahead of the straw poll, reports Dow Jones, US President Bill Clinton said he remained committed to seeing a European in charge of the Fund and dismissed criticism that the US acted improperly when it rejected Koch-Weser's candidacy. "I want there to be a European director for the IMF," Clinton said. "I will not support an American candidate even though I have enormous respect for Stanley Fischer... He is an enormously able man," he added.
While his government appeared to be standing by Koch-Weser, however, there were signs that within the EU-which officially endorsed him on Monday-support for the former World Bank managing director might be eroding. "It's clear that nobody can be named against the wishes of the US, any more than they could name a new managing director against that of the Europeans," European Commission President Romano Prodi says in Friday's edition of the Financial Times Deutschland. "We're in a situation of reciprocal vetoes," the FT (p.1) quotes him as saying.
Schröder's foreign policy adviser, notes Reuters, said today the prospects for a European leading the Fund were good, despite the lack of agreement in yesterday's ballot. Michael Steiner told ARD (Germany) television the chancellor would meet Portuguese President Antonio Guterres, whose country holds the rotating EU presidency. The question was whether the IMF would have a role "that serves the whole world... Or is it an organization which simply serves the interests of one state," AFP notes Steiner said. "We think it must be an institution which represents the interests of the whole world. And Koch-Weser stands for this."
German Defense Minister Rudolf Scharping meanwhile said he was confident that the fight between Europe and the US over the top IMF post would not damage overall transatlantic relations. "Our interests and judgements are so highly identical, that a case such as this, as maddening as it might be, will not tilt our relationship out of balance", Scharping said yesterday. He called the US role in the conflict "incomprehensible and counterproductive," in terms of cooperation between the two powers, but also called for an end to mutual finger-pointing. "We are stuck with the situation we are in now, and must get through it," he said.
In Paris, French Finance Minister Christian Sautter said he expected Koch-Weser to get the job despite resistance by the US. "I am confident in the European candidate. I am convinced that the tradition that a European should head the IMF must be and will be respected. A view taken by the US about this candidate makes no difference to us," Sautter is quoted as saying.
The Times of London (p.18) reports meanwhile that former UK Chancellor of the Exchequer Kenneth Clarke was emerging last night as one of two possible British candidates to head the IMF. Sources close to him said they believed he would be interested if UK Prime Minister Tony Blair wanted to propose him for the job. Clarke's name surfaced as EU governments discreetly began the search for a new candidate in the expectation that Koch-Weser would effectively be blocked by US opposition at the Fund's executive board meeting last night. Unlike Koch-Weser, says the story, Clarke has the stature and experience for the post and is well-regarded in both Washington and IMF circles.
The news comes as former World Bank President Robert McNamara writes in a letter to the Economist (p.4) that he begs to differ from the view that Koch-Weser is "manifestly not the best choice" for the IMF because of a "mediocre career" at the World Bank with "almost no management experience". Koch-Weser worked directly for him for ten years, McNamara writes, noting that almost exactly 20 years ago, Koch-Weser was assigned the complex and delicate task of managing China's re-entry into the Bank. His work led to an immensely productive political and economic relationship between China and the Bank. He opened the way for a similar relationship between the Bank and the Middle East. It was these accomplishments that led incumbent World Bank President James Wolfensohn to appoint Koch-Weser a managing director at the Bank, the youngest person ever to hold such a post.
Commenting in an editorial, Die Welt (Germany, p.) says the candidacy of Koch-Weser, whose image has taken a beating in the contest for the IMF post, has been Schröder's biggest foreign policy defeat to date. His candidacy was doomed to fail from the beginning and Schröder was foolish to push it. But the US has behaved as clumsily, and stands as an uncompromising hegemonic power. A Washington Times editorial (p.A18) opines that "[U.S. President] Clinton was right in objecting to Mr. Koch-Weser's candidacy, but he should have expressed that months ago."
Also in a letter to the Economist (p.4), Bretton Woods Committee Deputy Director Randy Rodgers writes that the process of wheeling-and-dealing is no longer typical of the IMF's decision-making, which has become more transparent and accountable to its members. The Fund would be hard-pressed to continue with such a method when selecting future chiefs. Developing countries are frustrated with G7 dominance of international financial decision-making.