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Europeans stall on IMF Nomination as Draghi rules himself out

[PARIS] European countries are unable to agree on who should be the next head of the International Monetary Fund (IMF), with the French now looking to widen the range of candidates by getting rid of the job's age limit, according to several people with knowledge of the talks.

The Europeans won't be able to present a candidate by Friday as originally expected, said the people on condition of anonymity because the deliberations are private. Christine Lagarde is leaving after eight years to take over at the European Central Bank (ECB). A decision on who is to replace her is more likely the middle of next week, the people said.

According to a half-century-old agreement, the head of the IMF is a European while the US picks the chief of the World Bank. Part of 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's since evolved.

"We are working very intensely on finding a common proposal and it looks like we will," German Finance Minister Olaf Scholz said in an interview Thursday with Bloomberg Television. "We will find a European proposal."

The European selection promise is being coordinated by French Finance Minister Bruno Le Maire. Paris isn't formally putting forward its own candidate, after successfully installing the previous two and having Lagarde run the ECB. Among the contenders are former Dutch finance minister Jeroen Dijsselbloem, Spanish Finance Minister Nadia Calvino, Bank of Finland Governor Olli Rehn, and Portuguese Finance Minister Mario Centeno just behind, according to several people involved in the talks.

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Age Limit

A 65-year-old age limit prevents two other potential names: Italy's Mario Draghi, the 71-year-old retiring head of the ECB, and Bulgaria's Kristalina Georgieva, the 65-year-old chief executive of the World Bank.

France has raised the idea of abolishing the age restriction, but has yet to create a consensus, either behind the rule change or Georgieva, the people say. German magazine Wirtschaftswoche reported on Thursday that France is pushing for Mr Draghi after failing to win support for Georgieva.

But Mr Draghi on Thursday ruled himself out, while France isn't pushing any particular choice but working to find a common European view, according to a French official with direct knowledge of the discussions. Another French official said Europe must unite behind the strongest possible candidate because developing countries are ready to step if Europe wavers.

Mr Le Maire already shot down one potential heavyweight option, Bank of England Governor Mark Carney. He has an Irish and a UK passport but was born in Canada and the French didn't consider him European enough.

Portugal says it didn't initially push for Mr Centeno. "It's not an objective we have set. The hypothesis that appeared and which is on the table is a hypothesis that obviously we have to consider," Prime Minister Antonio Costa said in an interview with Radio Observador last week.


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