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Who will replace IMF's Lagarde?

Jul 08 2019 19:41
Marine Strauss, Jeannette Neumann and Lorenzo Totaro

The next head of the International Monetary Fund should be a European, the finance ministers of France and Spain said on Monday as governments started talks on Christine Lagarde’s successor.

“What we want in France is first to have a European Union candidate that can succeed Lagarde as the head of the IMF; secondly, we want to be able to take a decision quickly; thirdly, I want it to be a unique candidate, presented by the EU, without useless rivalries,” France’s Bruno Le Maire said in Brussels on Monday. Spain’s Nadia Calvino said it is a “priority” to appoint a European.

EU leaders nominated Lagarde last week to take over from Mario Draghi as next head of the European Central Bank, sparking speculation over the survival of the longstanding tradition of Europe holding the IMF while the US appoints the head of the World Bank. The fund’s past 11 leaders have been European.

French connections

While Calvino said it is “premature” to discuss the names of potential candidates, one person widely considered to be in the frame might test the limits of what it means to be European. Mark Carney, currently governor of the Bank of England, is Canadian by birth but holds Irish and British passports as well.

Governments are actively discussing nominating him, a person familiar with the matter said last week.

Benoit Coeure, an ECB Executive Board member whose term ends in December, ruled himself out of the race in a radio interview broadcast on Monday. Still, Lagarde said she wasn’t interested in running the ECB right up until she was nominated.

Le Maire has said he’s not a candidate. Any bid by France could falter as both Lagarde and her predecessor, Dominique Strauss-Kahn, were French. Jens Weidmann, president of Germany’s Bundesbank, has also ruled himself out.

Other possibilities include Bulgarian Kristalina Georgieva, the chief executive of the World Bank. She missed out on the nomination for the European Commission presidency so could fit the bill, as could former Dutch Finance Minister Jeroen Dijsselbloem.

Draghi’s name continues to be floated, despite the Italian being above the IMF’s age limit. Asked about that prospect on Monday, Italian Finance Minister Giovanni Tria said “he is the one who should be asked about that”.

Finance ministers will also discuss the post-bailout situation in Greece and Spain, the international role of the euro, Italy’s budget and deepening of economic and monetary union.

--With assistance from Alexander Weber and Lyubov Pronina.

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