EU’s Grand IMF Bargain: Georgieva Nominated to Lead IMF After Bitter Vote

Written by | Tuesday, August 6th, 2019
@Eubulletin

Kristalina Georgieva, the World Bank‘s chief executive, was picked by EU member states as their candidate to lead the International Monetary Fund (IMF) following an acrimonious process in which EU governments initially struggled to rally behind a single candidate during weeks of talks. But all efforts trying to agree on a compromise candidate through multiple ballots still ended in disagreement over the voting rules. Georgieva, who is widely expected to succeed Christine Lagarde – of course, if she can win the backing of the IMF board later in the autumn – will have to deal with many challenges, notably confronting a weakening world economy, threatened by escalating trade tensions.

 

“Georgieva has all the skills needed as well as the experience and international credibility to succeed Christine Lagarde and to lead the IMF successfully,” said a statement from the French finance ministry following the announcement of her nomination. The European search for Lagarde’s replacement tested the support for five candidates: Kristalina Georgieva, Bank of Finland Governor Olli Rehn, Spanish Economy Minister Nadia Calvino, Portuguese Finance Minister Mario Centeno and former Dutch Finance Minister Jeroen Dijsselbloem. While Georgieva and Dijsselbloem made it to the final round, it was the latter who eventually conceded defeat on Twitter. Hailing from a village in the EU’s poorest member state, the Bulgarian economist’s appointment would be celebrated as another great achievement for the EU’s ex-communist wing, since Donald Tusk took charge of the European Council.

 

An unofficial transatlantic agreement typically allows the US to select the president of the World Bank while Europe selects the managing director of the IMF. Earlier this year, US Treasury official David Malpass was selected to run the World Bank following President Trump’s successful lobbying campaign. But Georgieva’s rise could still be complicated by not meeting the age limit (she is 65) when her term would start, meaning the IMF would need to change its bylaws if she were to be appointed. This, along with the discord in Europe over the process, could still encourage non-European countries to put forward their own qualified candidates in the context of the increasingly accepted view that their growing weight in the world economy gives the emerging market economies a claim on the job.

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