Europe's search for next IMF chief narrowed to three hopefuls

The top vacancy comes after Christine Lagarde (above) resigned to lead the European Central Bank.
The top vacancy comes after Christine Lagarde (above) resigned to lead the European Central Bank.PHOTO: AFP

BRUSSELS (BLOOMBERG) - France is seen supporting Kristalina Georgieva to be the next head of the International Monetary Fund as the EU seeks to agree on a single candidate ahead of the lender's Sept 6 deadline, according to several European officials familiar with the deliberations.

A first round of talks led by French Finance Minister Bruno Le Maire, who is coordinating the search on behalf of the European Union, tested the support for five candidates. These include Spanish Economy Minister Nadia Calvino, Portuguese Finance Minister Mario Centeno, former Dutch Finance Minister Jeroen Dijsselbloem, World Bank Chief Executive Georgieva and Bank of Finland Governor Olli Rehn.

Consultations over the weekend led to confusion over which candidates have enough support to be considered front runners, highlighting the complex and sensitive geographic and political balance required to reach an agreement.

Further calls are set to take place Monday and Tuesday (July 29 and 30) in an effort to reach consensus by the end of the week, one official said.

Earlier Monday, two officials said that the list had been reduced to three names, a claim denied by the spokesperson for the French finance ministry.

While France has not openly expressed support for Georgieva - or any candidate - French officials have spoken highly of her nomination, both as way to keep the post in the hands of a woman and to hand a top job to the EU's newer Eastern members.

The IMF said in a statement last week that its application process opens July 29 and closes Sept 6. The board intends to complete the process by Oct. 4.

 
 

The top vacancy comes after Christine Lagarde resigned this month to lead the European Central Bank. A European traditionally runs the Washington-based IMF and the next leader will confront a world economy at its weakest since the aftermath of the financial crisis. Last week, the fund further reduced its global growth outlook, already the lowest since the crisis, to a projected 3.2 per cent expansion this year.

Historically, Europe has had a lock on the position, but this time has struggled to get behind any one candidate. In order to widen the field of likely candidates the French also suggested looking into scrapping the job's age limit. Such a change would be necessary if Georgieva, 65, was to be appointed - but it would also require changing IMF bylaws.

Under a half-century-old agreement, the head of the IMF is a European while the US picks the World Bank chief. That tradition prevailed when the American David Malpass was selected as the World Bank's president in April.

But Europeans are uncertain whether President Donald Trump's administration will return the favour - and emerging markets have been arguing for years that the arrangement reflects a world that has since evolved.