Expatica news

Berlin, Paris want European to head IMF

22 March 2004

BERLIN – France and Germany said Monday they agreed that a decision should be made as quickly as possible on naming a new head of the International Monetary Fund (IMF) and that, in keeping with tradition, the person should be a European.

In talks in Berlin as part of the regular Franco-German economic consultations, German Finance Minister Hans Eichel and his French counterpart Francis Mer also insisted that the next IMF chief should be from Europe.

They did not put forth any names, but said that the issue should be resolved by the time the IMF holds its spring meeting at the end of April.

Eichel and Mer said that the European Union members should quickly agree on a joint candidate, with Eichel saying there were “very good grounds” for the next IMF boss being from Europe.

But it was important that a decision be reached soon, he said, because the longer the debate was drawn out, the more difficult the decision could become.

Mer said he was convinced that the EU would agree on a joint candidate. “In any case our European candidate will be a good one,” he said.

The IMF director-general post has been vacant since Horst Koehler, a German, stepped down in early March after his name was officially put forward by Germany’s opposition camp as its nominee for the country’s presidency. The election in the national federal assembly is set for May.

Traditionally, a European heads the IMF while an American leads the sister organization, the World Bank, with both institutions based in Washington D.C.

But a number of developing and threshold countries have been calling for a transparent election proceedings.

While Germany made clear, after Koehler’s resignation, that it would not put forth a candidate for the IMF spot, France, according to French press reports, is favouring Jean Lemierre, currently chief of the European Bank for Reconstruction and Development.

Also at the Franco-German consultations, the head of the German Bundesbank, Ernst Welteke, said that he saw no need to revise current projections about Germany’s economy this year despite “certain risks”.

Welteke also indicated that the European Central Bank was not planning any change in its interest rates.

Welteke said that the current liquidity in the eurozone was sufficient in order to “generate inflation-free growth”, a comment hinting that the ECB would not move to reduce its main rate now at 2 percent, double the US Federal Reserve’s main rate.


Subject: German news