The grab for IMF brass ring
Help Wanted: Chief of an international financial institution based in Washington. One of the most prestigious positions in the world. Meets powerful national leaders frequently. Plenty of travel. Must be fluent in English plus at least one other language. Needs a strong economic and financial background. Nationality: European. Salary, nearly $200,000 plus entertainment expenses and other benefits.
That job is open. It is the managing director of the International Monetary Fund. Michel Camdessus, the former French official who has held the job for 13 years, is leaving this month. The IMF is having a hard time filling his job.
The Financial Times of London carried a story January 31 that German Chancellor Gerhard Schrder had made a personal appeal to President Bill Clinton to give the job to Caio Koch-Weser, a top German finance official.
The chancellor, according to the report, warned that this appointment was "vital to US-German relations," and that he would veto other non-German candidates.
Ah! Arm twisting.
Germany promptly denied the report. Whether true or not, the Germans were pressing hard for the appointment at a meeting of European finance ministers in Brussels, January 31. The candidacy has every chance of succeeding, with support of all but one of the 15 European Union states, German Finance Minister Hans Eichel indicated.
France, it is assumed, is resisting. Maybe also the US, which has veto power, in effect.
Behind this fuss are several factors:
*The head of the IMF has an important job. Mr. Camdessus has become famous for his role in the financial rescues of Mexico, emerging Asia, and Russia. The IMF has been much involved - some say it deserves some blame - in the financial crisis that led to a coup in Ecuador last month.
Though subject to a board that includes the US, European nations, and Japan, the managing director and his associates do negotiate financial rescue packages.
*By tradition, Western Europe has the right to appoint the head of the IMF.
Similarly, the US names the president of the World Bank, the sister institution of the IMF. It reappointed James Wolfensohn for five years a few months ago.
The IMF job has been held by French men for 40 years, except for a short interlude with a Dutch finance minister. The Germans figure it is their turn at the helm. It is a matter of national prestige.
But there are some oddities here.
Mr. Koch-Weser was born and raised in Brazil. His grandfather, a justice minister in the Weimar Republic, left Nazi Germany. The son worked 25 years at the World Bank. He only went to Germany 10 months ago to take his present job. But he wants to be Europe's man at the IMF.
Further, if the Europeans can't agree on a candidate, Stanley Fischer, an American born in Rhodesia and No. 2 at the IMF, will become acting managing director. "If there is no solution, there's a solution," notes one IMF expert. "Very awkward."
The Europeans are already bothered by what they see as US economic hegemony. This puts pressure on them to agree.
For the US, however, the IMF managing director must be a politician/financier more than a bureaucrat (such as Koch-Weser). He (no females have been mentioned) must be able to deal with a Congress that wants profound changes in the IMF and World Bank.
Even if Democrats win the White House and the House of Representatives, Sen. Phil Gramm (R) of Texas is likely to remain the power to deal with in a Republican Senate. He wants the IMF to stay out of a crisis until foreign lenders have taken a financial hit, and then make only short-term loans.
In a wave to Mr. Gramm, US Treasury Secretary Lawrence Summers spoke in December of shrinking the IMF's role. He may not mind if Mr. Fischer, his buddy from days teaching at Massachusetts Institute of Technology, Cambridge, holds the reins at the IMF until election time next fall.
Maybe the want ad should include: Candidate needs political, business experience.
*David R. Francis is senior economic correspondent for the Monitor.
(c) Copyright 2000. The Christian Science Publishing Society