| The head of the foundation was offered to become the President of Germany The complexities of the internal political situation in Germany unexpectedly and very seriously affected the work of the International Monetary Fund. IMF Managing Director Horst Köhler suddenly left his post yesterday, as he is 100% likely to be elected federal president of Germany on May 23. Mr. Koehler himself announced this yesterday at noon Washington time to the IMF board of directors, amazed at such rapid developments. First Deputy Managing Director Anne Kruger will serve as head of the fund on an interim basis.
The IMF has heard rumors that Mr. Köhler is being considered for the presidency of Germany. However, he himself gave no indication that these rumors had any serious basis. Moreover, it was expected that the head of the IMF would not only last until his contract expired in May 2005, but would also have a good chance of remaining for a second term. However, on the night from Wednesday to Thursday, the two most influential opposition parties in Germany - the CDU/CSU and the FDP - after lengthy discussions, finally and unexpectedly for many, agreed on the candidacy of Horst Köhler for the post of President of Germany. Since the Christian Democrats, together with the Free Democrats, have a majority in the Federal Assembly (which, according to the German constitution, elects the president), the name of the successor to the Social Democrat Johannes Rau can safely be considered named. Thus, the candidacy of the head of the parliamentary faction of the CDM/CSU, Wolfgang Schäuble, was finally rejected, behind whom stretches the “tail” (albeit, as is commonly believed, laundered) of the financial scams of ex-Chancellor Helmut Kohl. In the final round of negotiations between the two parties, along with Mr. Köhler's name, the candidacy of the Minister of Culture of Baden-Württemberg, Annette Schavan, appeared.
If Germany seems to have happily resolved the problem of a successor for Johannes Rau, the IMF risks getting into a long and quarrelsome campaign to agree on a candidate for managing director for the second time. Let us recall that the name of Horst Köhler arose only after Germany unsuccessfully convinced other shareholders of the fund of the merits of the then Deputy Minister of Finance of Germany Caio Koch-Weser. The alternative, represented by the then first deputy director of the fund, Stanley Fisher, looked much more convincing, but did not correspond to the tradition of dividing spheres of influence, according to which a European should lead the IMF, and an American representative should lead the World Bank. As a result, Germany agreed to cede one of its international positions, “moving” Horst Köhler from the post of head of the European Bank for Reconstruction and Development (he was taken by the Frenchman Jean Lemierre) to the IMF.
A long and contentious debate four years ago forced IMF shareholders to consider breaking with tradition and creating a more formal regime for appointing a managing director. For this purpose, a special committee was even created, which presented a voluminous report to the fund’s shareholders. But so far, as far as we know, there is no new procedure. And since the fund’s shareholders were not preparing for Mr. Koehler’s resignation, there are no more or less convincing candidates yet. Yesterday, only names that were “well-known” were discussed - former French finance ministers Dominique Strauss-Kahn and Laurent Fabius, EBRD head Jean Lemierre, and Englishman Andrew Crockett, head of the Bank for International Settlements. It is also likely that Germany will again nominate Caio Koch-Weser. "There is no doubt that there are other Germans besides me who would be willing to take this post," Mr Köhler told reporters yesterday.
However, it is very likely that the United States, as the fund’s largest shareholder, will decide to break traditions, nominate its own candidate and get him elected.
IMF Executive Director from Russia Alexey MOZHIN:
- The fact that Horst Köhler has been nominated for such a post is a great honor both for the outgoing Managing Director and for the IMF as an institution. During his 4 years at the head of the IMF, Horst Köhler did a lot for the fund. I would highlight three fundamental things. Firstly, soon after joining the IMF, he created a financial markets department within the fund's structure. The Fund began to conduct consistent monitoring of global financial markets, the absence of which was a “weak point” in the work of the IMF. Secondly, with the direct participation of Mr. Koehler, the conditions for issuing loans from the fund were rationalized. If earlier, when concluding a program, the fund could impose dozens of conditions on the country (in some cases the list exceeded a hundred), now this procedure has been simplified. Thirdly, and this concerns not only the professional, but also the personal qualities of Mr. Koehler, he was never afraid to express criticism of the “powers that be.” In particular, he persistently spoke about the harm of protectionism in developed countries, that all the aid that poor countries receive is much less than what they lose from protectionist measures. Yuri ShPAKOV, Berlin, Andrey DENISOV |
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