IMF front-runner list to replace Lagarde narrows to Eurozone candidates

  • Business
  • Thursday, 18 Jul 2019

Changyong Rhee, director of the IMF

THE list of front-runners to succeed Christine Lagarde as head of the International Monetary Fund has narrowed to four eurozone officials, according to several senior European officials.

Finance ministers from the Group of Seven nations discussed the front-runners on the sidelines of a summit on Wednesday in Chantilly, France, the officials said.

Ms. Lagarde, who has been nominated to lead the European Central Bank, formally resigned her IMF post Tuesday, opening the way for a successor to be appointed in the coming months.

Europe’s four largest nations—Germany, France, Italy and Britain—are part of the G-7 group of wealthy nations, along with the U.S., Canada and Japan. Their finance ministers are meeting in Chantilly, France, on Wednesday and Thursday to debate issues such as taxation, crypto assets and inequality.

According to the senior European officials, the ministers discussed the following candidates: Jeroen Dijsselbloem, the former finance minister of the Netherlands and former president of the Eurogroup, the club of euro-area finance ministers; Mário Centeno, current head of the Eurogroup and Portugal’s finance minister; the governor of the Finnish central bank, Olli Rehn, and Nadia Calviño, the Spanish economy minister and a former senior European Union official.

Mark Carney, the Canadian-born governor of the Bank of England, who was previously mentioned as a front-runner, isn’t on the shortlist.

One official said Mr. Carney, who also holds Irish and British citizenships, wouldn’t be considered because of his non-European origin. Another official said the overwhelming reason was the desire to nominate a candidate from the eurozone community.

Though the leadership of the IMF is officially open to people from any country, the managing director has always been a European throughout its 75-year history. As part of an informal agreement with Washington, Europeans support the American pick to lead the World Bank in exchange for the U.S. supporting Europe’s favored candidate at the IMF.

Several officials agreed that Britain wasn’t taking a key role in the discussion about the next leader of the IMF because it intends to leave the EU.

“No one doubts Mark’s excellent credentials and competence, but there are other factors at play when selecting a European candidate,” said one official familiar with the discussions.

Another official said the ministers didn’t settle on a favored candidate Wednesday evening but agreed to nominate one by the end of the month.

Mr. Dijsselbloem, the outspoken Dutch politician, has support from Germany and France, according to officials from these countries, but is opposed in southern Europe due to his perceived role as enforcer of austerity during his Eurogroup tenure.

If these objections scuttle Mr. Dijsselbloem’s candidacy, Mr. Rehn, formerly the EU Commissioner for Economic and Monetary Affairs and the Euro, would be a natural candidate among the fiscally conservative northern nations such as Germany.

Mr., Centeno and Ms. Calviño would have the immediate support of the southern European rim, with the latter having an additional advantage of being the only female candidate.

IMF rules for selecting the managing director stipulate that the incumbent mustn’t be older than 65 years old at the time of the appointment.

A senior U.S. Treasury official said Treasury Secretary Steven Mnuchin was expected to be involved in discussions about Ms. Lagarde’s successor, but that without a full field of candidates, it was premature for the U.S. to take a specific position in support of one candidate. - WSJ

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