Kristalina Georgieva - an Ideal Candidate for the International Monetary Fund but the Path to Election will not be Easy

Novinite Insider » OPINIONS | August 4, 2019, Sunday // 10:29
Bulgaria: Kristalina Georgieva - an Ideal Candidate for the International Monetary Fund but the Path to Election will not be Easy

Kristalina Georgieva was named as the European Union's single candidate for the next managing director of the International Monetary Fund (IMF).

An experienced economist and politician, she is the ideal candidate to head the IMF, comments the German business daily Handelsblatt. The publication recalls her experience in leading positions at the World Bank and the European Commission.

A highly respected economist who has applauded for her job at the World Bank, should she be appointed in October, she will become the first Eastern European to head the IMF, notes the British Financial Times.

However, her choice was accompanied by fierce disputes between EU finance ministers and a chaotic e-mail ballot procedure, Handelsblatt recalls. Of the original five candidates, only two remained in the last round of voting - Georgieva and Dutchman Jeroen Dijsselbloem.

France has long expressed strong support for the Bulgarian woman, as well as a number of southern European countries determined to thwart Dijsselbloem, who, as chairman of the Eurogroup, has imposed austerity on the eurozone during the crisis.

Germany, the Nordic countries and the Social Democratic governments, on the other hand, stood behind the Dutchman, according to the newspaper.

After the second vote, Georgieva gathered the support of 56% of the Member States, representing 57% of the EU population. Although the initial requirement was to support 65% of the population, according to French Finance Minister Bruno Le Maire, who was charged with leading the process, Georgieva's preference was obvious. After two hours of intense phone calls, Dijsselbloem admitted his defeat.

The result is another victory for French President Emmanuel Macron after France managed to win the European Central Bank for the current head of the IMF, Christine Lagarde, and ensure that he would become Belgian at the helm of the EU Council, according to the Financial Times. Paris was among Georgieva's biggest supporters, which contrasted it with its allies in the eurozone, Germany and the Netherlands, the newspaper notes.

"Ms. Georgieva has all the skills, experience and international confidence to succeed Christine Lagarde and successfully lead the IMF," said Le Maire.
Until September 6, other countries also have the opportunity to nominate candidates for the post.

The UK does not nominate a candidate, contest the process as a whole and abstain from voting. British Prime Minister Boris Johnson is considering proposing former Treasury Secretary George Osborne, who according to London is a possible compromise candidate, according to the Financial Times. Another name that is mentioned is Bank of England Governor Mark Carney.

US support also remains an open question, writes the US New York Times. There is speculation that President Donald Trump may nominate an American for the post, notes the newspaper and recalls an interview with Treasury Secretary Steven Mnuchin last month, who said it was not an "absolute given" that the IMF should be headed by a European.

Although the "gentlemen's agreement" for the Fund's management reads, this unwritten tradition is increasingly challenged, especially by aspiring emerging markets, according to Handelsblatt. Already during Lagarde's second term, there was resistance and this group of countries tried to raise their own candidate. However, they had the same problem as the one now faced by the Europeans - they failed to unite behind a common candidate.

In order for Georgieva to head the IMF, it will also be necessary to bypass the age limit of 65 for the head of the organization, as she will soon turn 66. However, according to the French Ministry of Finance, this will not be a problem, but to circumvent the rule also appears to have the tacit approval of Washington, notes the German edition.

The IMF was established after the end of World War II with the World Bank. Its aim is to stabilize the international monetary system, to detect at an early stage signals of imminent financial crises and to assist countries in financial distress. For a long time, it was perceived as the cold fist of capitalism, notes the publication. During the Asian crisis in the 1990s, it was accused of providing assistance to the countries concerned only on the condition that they adopt fierce austerity programs and restrictive monetary policies.

However, over the last 20 years the organization has changed significantly. It is increasingly engaging with issues related to equality and inequalities and advocates for higher taxes for high-income people to reduce the gap between the poor and the rich. This idea has been strongly criticized by advocates in the liberal market.

Other critics of the IMF say it has neglected its core role. For example, the Fund did not attempt to mediate the US-China trade dispute. However, the organization is widely recognized for its profound economic analysis, the newspaper said.

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