[stop-imf] Spain's Rato set to become new IMF chief

[robert.weissman@essentialinformation.org]

Spain's Rato set to become new IMF chief
By Ed Crooks in London and Andrew Balls in New York
Published: April 19 2004 19:22

Rodrigo Rato, Spain's former finance minister, has become
the presumptive managing director of the International
Monetary Fund, after his leading rival dropped out of the
race.

France and Germany had been backing Jean Lemierre,
president of the European Bank for Reconstruction and
Development, but on Monday Mr Lemierre said he expected to
remain at the EBRD for another four-year term.

"I am committed, very committed, to the EBRD and I am very
committed to this mandate that you have given to me," he
said at its annual meeting in London.

On Monday night, Nicolas Sarkozy, the French finance
minister, gave his backing to the Spaniard, saying Mr Rato
had indicated that he would take account of French
priorities.

Charlie McCreevy - the finance minister of Ireland, which
currently holds the European Union's rotating presidency -
is expected to announce shortly that Mr Rato has the
backing of all EU members. Although the appointment of a
managing director is formally made by the IMF's executive
board, representing all of its members, the post has
traditionally been a European fief.

On Monday, Samuel Bodman, deputy US Treasury secretary,
indicated he expected that tradition to continue.

The US has not publicly expressed a preference between Mr
Rato and Mr Lemierre, but European officials have said
that Mr Rato is the favoured US candidate. He is widely
seen as having the better political skills, and has much
broader support outside Europe, making it more likely that
he can become a consensus candidate.

Latin American countries have indicated their support for
Mr Rato, and Spanish officials have said he has been
lobbying successfully for support in Russia and Asia. But
some countries and independent economists have complained
about the way in which the appointment appears to have
been fixed within the EU.

Milen Velchev, Bulgaria's finance minister, who had been
nominated by his country for the job, said: "The process
of choosing the managing director has not been
sufficiently transparent in the past, and there are no
signs yet of it becoming more transparent."

Mr Rato's appointment is likely to be formally confirmed
within weeks - although this weekend's of the IMF and
World Bank will probably come too soon to allow for the
details to be resolved. One remaining question is whether
other candidates will be nominated formally by other
countries. Shakour Shaalan, Egypt's executive director,
has said he will nominate Stanley Fischer, Andrew Crockett
and Mohamed El-Erian, all former IMF officials. But Mr
Shaalan has yet to nominate his three candidates at a
board meeting.

If Mr Rato is the only candidate formally nominated, it is
likely that his appointment will be confirmed quickly.

Additional reporting by Stefan Wagstyl