Posted on 03/17/2004 2:45:18 PM PST by Shermy
PARIS (AFP) - Outgoing Spanish Economy Minister Rodrigo Rato emerged as a leading European candidate to head the IMF, but his chances of getting the nod were later thrown into doubt on reports that France would not back him.
French President Jacques Chirac informed German Chancellor Gerhard Schroeder in talks Tuesday that he would not support Rato to become the next managing director of the International Monetary Fund, the German newspaper Suddeutsche Zeitung reported in its Thursday edition.
The French government declined to comment on the report.
But a presidential spokesman said: "The priority is that the managing director be a European, as is customary.
"For that to be the case, the European candidacy must have the consensus of all members of the IMF, including non-Europeans."
By tradition the post of IMF managing director is reserved for a European while that of World Bank president goes to an American.
French opposition, if confirmed, was seen as likely to jeopardize Rato's chances of succeeding Horst Koehler, who is stepping down to stand as a candidate for the German presidency.
Rato has been a leading figure in the administration of Spanish Prime Minister Jose Maria Aznar, whose conservative government was defeated by the Socialist Party in elections Sunday that followed last week's deadly Madrid bombings.
He was also a fervent defender of the eurozone's Stability and Growth Pact. At a meeting last November of European Union finance ministers he supported the imposition of disciplinary measures against France and Germany -- as sought by the EU executive commission -- for their failure to respect eurozone rules limiting public deficits.
But his position was not shared by other ministers and the meeting decided to exempt Paris and Bonn.
France and the Aznar government were likewise at odds over the war in Iraq, which Aznar backed and Chirac opposed, as well as on a proposed European constitution.
Rato had earlier been reported to have garnered the backing of a number of European leaders, including Spanish prime minister-elect Jose Luis Rodriguez Zapatero, British Chancellor of the Exchequer Gordon Brown, Luxembourg Prime Minister Jean-Claude Juncker and Belgian Finance Minister Didier Reynders.
Sueddeutsche Zeitung said Germany was not planning to put forward its own candidate.
Whatever consensus of support Rato might build in his favor in Europe, his candidacy must be approved by the United States before he can take the top job at the international lending institution.
Koehler was appointed in 2000 but only after a struggle for influence among Europeans. Several names were floated, notably that of German state secretary in the finance ministry Caio Koch-Weser, while the Netherlands also wanted to propose a candidate.
At the time, the United States blocked Koch-Weser's candidacy to replace the Frenchman Michel Camdessus.
European ministers now hope to reach agreement on their candidate ahead of the spring meetings of the IMF and the World Bank in Washington April 24 and 25.
In addition to Rato, the names of Frenchman Pascal Lamy, currently European Trade commissioner, as well as European Bank for Reconstruction and Development head and fellow Frenchman Jean Lemierre, have been floated.
Briton Andrew Crockett, a former head of the Bank for International Settlements, has in addition been mentioned.
The IMF aims to promote monetary cooperation and economic and employment growth but has been sharply criticized for its handling of recent financial crises in developing countries.
Zapatero backs outgoing Rato for top IMF job
"It is clear that we want him to be elected and I think that there is a chance that he will be," Zapatero said Wednesday.
He said in remarks on Spanish radio Onda Cero: "It would be good news and we shall do everything to bring it about."
Spain's role is to subsidize the deficits of the EU core states Germany and France. He needs to "shut up" and take it as Chirac said to the Eastern Euro states.
Naturally in a few days Blair could voice their support for Rato...
I'm not sure what the French govt. means, except maybe they'll coerce their African colonies to chime in against Rato, making it appear France isn't acting "unilaterally."
Precisely. France is determined that the EU will serve French interests. Rato and Aznar saw it as a partnership; they clearly didn't get it and the fact that Rato was willing to defy Paris is reason enough to sink him.
The US position should be to make sure France does not dictate the leadership of the IMF.
Posturing is the name of the game.
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