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Europe: Row Over EBRD Presidency Leaves Post Vacant

  • Stuart Parrott



London, 10 February 1998 (RFE/RL) -- The European Bank for Reconstruction and Development (EBRD), set up to offer financial help to the eastern countries, is without a president because of the failure of West European governments to agree on a candidate.

Analysts blame the failure to choose a successor to President Jacques de Larosiere, who stepped down last month, on traditional national rivalries for the top jobs of European institutions. They say the indecision -- which some blame of France -- is damaging the authority of the bank.

De Larosiere, a former head of the Bank of France and the International Monetary Fund, was originally due to retire last summer (he turns 70 this year), but postponed his departure to allow the EBRD's board more time to choose a successor.

But the board has been unable to do so and the issue may not be settled until the bank's annual meeting in May. In the interim, the bank is being run by an American vice-president, Charles Frank.

De Larosiere himself said on the eve of his departure that it was a bad time for the EBRD to be without a head. He said: "This bank deserves a good president and deserves it now because it is important to have at the helm someone who is fully in charge."

The EU is poised to hold crucial talks in the next few months on two issues of vital importance to the EBRD -- the introduction on January 1, 1999, of a European single currency, and enlargement of the union to include the east and central Europeans.

The accession negotiations -- expected to focus first on the membership claims of the Czech Republic, Poland, Hungary, Estonia, Slovenia and Cyprus -- are due to open next month.

The decision on a new bank president is up to the 60 shareholders of the EBRD -- which comprise 58 countries in east and west, the European Union and the European Investment Bank. The appointment is decided in a vote by the shareholders.

However, an EBRD spokesman told our correspondent today: "As far as we are aware, no official candidates have been put forward."

Reports say the French government has set off a behind-the-scenes-row by pushing for Frenchmen to head Europe's two key financial institutions: the EBRD and the future Frankfurt-based European Central Bank. This has upset France's partners who say Europe's top jobs should be not be under the grip of one EU country.

France is backing Philippe Lagayette, a former deputy governor of the Bank of France, for the post of EBRD president against the claim of Belgian finance minister Philippe Maystadt.

France is also pressing for Jean-Claude Trichet, governor of the Bank of France, for the job of first governor of the European Central Bank. This is reported to have upset the Germans who are backing Dutchman Wim Duisenberg for the Frankfurt post.

French finance minister Dominique Strauss-Kahn defended the idea that France could demand the job of president of the European Central Bank as well as that of the EBRD. He said: "I am kind of person who likes to have a cheese course as well as a dessert."

But the French demand is reported to have irritated the Germans, Dutch and Britons, and has put the EBRD in an awkward situation.

The EBRD has largely overcome the negative publicity that followed its launch when its first president, Frenchman Jacques Attali, was forced to quit in 1993 after two years, accused of extravagant spending on the bank's London offices. ...Now, the delay in picking a president is creating poor publicity again. An editorial in the Financial Times said the failure of west European governments, the principal shareholders in the bank, to decide on a successor is "a lamentable failure of their duty." ... t said the indecision is "a direct consequence of the ridiculous tradition of nationalistic musical chairs played for the top jobs of European institutions."
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