France's Lemierre re-elected EBRD chief

19th April 2004, Comments 0 comments

LONDON, April 19 (AFP) - Frenchman Jean Lemierre was re-elected president of the European Bank for Reconstruction and Development Monday, effectively ruling him out of the race to head the International Monetary Fund.

LONDON, April 19 (AFP) - Frenchman Jean Lemierre was re-elected president of the European Bank for Reconstruction and Development Monday, effectively ruling him out of the race to head the International Monetary Fund.

"We congratulate Jean Lemierre for his re-election as president of the EBRD," Luxembourg's Prime Minister Jean-Claude Juncker, who was chairing the bank's annual meeting in London, said of the decision by the board of governors.

The re-election was also hailed by the French economy and finance ministry.

Spain's outgoing finance minister Rodrigo Rato was now considered the favourite to replace Germany's Horst Koehler as IMF managing director.

However, an informal gathering of EU finance ministers on the sidelines of the EBRD meeting to confirm their choice of candidate to replace Koehler was cancelled.

EU finance ministers had agreed during a meeting in Ireland earlier this month to choose between Rato and Lemierre to succeed Koehler, after the German resigned in March to run for his country's presidency.

By tradition, the head of the global lending body is a European while the top job at the World Bank, the IMF's Washington-based sister institution, goes to an American.

But IMF officials and non-governmental organizations have questioned the European monopoly on the position, with Fund representatives from Asia, Africa, Latin America, the Middle East, Australia, Switzerland and Russia calling for a candidate to be chosen according to merit rather than nationality.

Rato, despite his government's election defeat last month, has won the support of a big grouping of Latin American countries and is backed by a number of smaller EU states to head the IMF.

He had emerged as an early favorite to replace Koehler but saw his chances fade -- while those of Lemierre gained strength -- when his conservative government was beaten in general elections just three days after the March 11 train station attacks in Madrid.

Rato was also considered to have been at a disadvantage because of perceived French and German backing for Lemierre.

He had been a trenchant critic of French and German public deficits, with both countries having failed to hold them to three percent or less of gross domestic product as mandated by EU regulations.

By contrast, Spain under Rato's stewardship has returned to zero deficits in the past three years and even moved into surplus as required under the EU's 1997 Stability and Growth Pact.

At the same time unemployment has fallen from 23 percent of the workforce in 1996 when Rato's Popular Party took power to a current 11 percent, though that level remains the highest in the European Union.

© AFP                                                   

                                                         Subject: French news

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