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World: German Choice For IMF Chief Expected To Get EU Backing

  • Ron Synovitz

Germany's candidate for the vacant post of director of the International Monetary Fund now enjoys the informal support of the entire European Union. But neither the U.S. -- the IMF's largest stakeholder -- nor some developing countries are enthusiastic about the German's possible appointment.

Prague, 16 February 2000 (RFE/RL) -- Caio Koch-Weser, Germany's candidate for the next chief of the International Monetary Fund (IMF), has emerged as the clear front-runner this week after an informal agreement by European Union foreign ministers to support his candidacy.

Koch-Weser has faced an uphill battle to replace retired IMF Managing-Director Michel Camdessus since Germany announced his candidacy late last year. The United States, France, and Britain have all expressed doubts about the credentials of the 55-year-old German for the post. But EU Economic Affairs Commissioner Pedro Solbes says he thinks the EU is now ready to accept Koch-Weser as its official candidate.

The breakthrough for Koch-Weser came during a meeting of EU foreign ministers in Brussels on Monday -- the same day that the resignation of Camdessus took effect and the IMF's second-in-command, Stanley Fischer, became interim director. A spokesman for the EU's Portuguese presidency (Manuel Meneses) said all 15 foreign ministers agreed their countries will formally support Koch-Weser's candidacy when EU finance ministers gather in Brussels on February 28.

So far, there is no firm schedule for a meeting of the IMF's executive board. That 24-member body, which represents the fund's 182 member countries, will make the final decision on the next managing director. But in practice the choice is made behind the scenes by the governments of the IMF's largest stakeholders. According to tradition, the IMF managing director has been a European while the World Bank has been headed by a U.S. citizen.

Nevertheless, Koch-Weser still must win over skeptics in the U.S., the largest IMF stakeholder. Washington's first public statements on the matter after the breakthrough in Brussels suggested, once again, that the U.S. does not think Koch-Weser has enough experience in national government or international finance to lead the IMF.

Speaking in Washington yesterday (Tuesday), State Department spokesman James Rubin said lack of support from developing countries also could prevent Koch-Weser's winning in the job.

"We believe that it is important to have the strongest possible managing director for the IMF. And it is important to identify a leader of considerable experience and judgment, with credibility in the markets, who's able to command a strong consensus among all IMF members. And it is important for the new managing director to be acceptable not just to the Europeans but to the membership as a whole."

Despite pronouncements from Brussels and Berlin this week, Paris and London have not yet publicly endorsed Koch-Weser. France is canvassing the idea of an informal vote among IMF members to test support for Koch-Weser in less developed states. The French move reflects the concerns of President Jacques Chirac that Germany has failed to win sufficient backing for its candidate. French Foreign Minister Hubert Vedrine has said only that Paris will support Koch-Weser if there is consensus among all other EU members.

In London, officials at the Exchequer (Finance Ministry) also say they are not actively backing any candidate for now, but that they have not ruled Koch-Weser out.

Koch-Weser, Germany's deputy finance minister, only entered government last year, after Finance Minister Hans Eichel replaced left-leaning Oskar Lafontaine. Koch-Weser's primary experience in international finance has been with long-term development loans, which he worked on as a health projects officer during much of his 26 years at the World Bank.

His last job at the World Bank, as managing director for operations, brought him into contact with many government leaders in Eastern Europe and the former Soviet republics. He has been highly critical of the environmental records of East European states, saying their governments have not done enough to improve air-pollution standards.

But he also has worked to help those countries deal with their ecological challenges -- including lobbying to obtain millions of dollars from the Group of Seven leading industrial nations to help Russia eliminate ozone-depleting emissions.

Koch-Weser has regularly attended Central and East European economic summits. He has also met personally with Azerbaijani President Heidar Aliyev in Baku to help finance agricultural development, improve medical facilities and rebuild the national education program. In negotiating billions of dollars in loans to Azerbaijan, Koch-Weser stressed that the funds be linked to the implementation of continued economic reforms by Baku. If appointed to the top job at the IMF, he is likely to make the same point elsewhere.