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BRIC countries slam Europe’s ‘obsolete grip’ on the IMF top job

Wednesday, May 25th 2011 - 07:00 UTC
Full article 9 comments
Francois Baroin, France's budget minister: “the Euro needs our attention” Francois Baroin, France's budget minister: “the Euro needs our attention”

Top emerging economies joined forces to slam Europe's “obsolete” grip on the IMF top job, even as France's finance minister appeared to strengthen her lead in the race to replace Dominique Strauss-Kahn.

Brazil, Russia, India, China and South Africa, known as the BRICs, sharply criticized European officials on Tuesday for suggesting the next IMF head should automatically be a European.

In the first joint statement issued by their directors at the Fund, the BRICs said the choice should be based on competence, not nationality, and called for “abandoning the obsolete unwritten convention that requires that the head of the IMF be necessarily from Europe.”

French Finance Minister Christine Lagarde plans to announce her candidacy on Wednesday after the European Union agreed to back her, diplomatic sources said.

Hours before the BRIC statement was issued in Washington, France's government said China would back Lagarde to succeed Strauss-Kahn who quit after he was charged with sexually assaulting a hotel maid in New York.

Emerging nations say it is time for Europe's 65-year grip on the IMF to be loosened but no clear consensus candidate to represent them has emerged.

Mexico's top central banker said some countries welcomed his decision to run, while South Africa and Kazakhstan may put forward their own candidates.

Following Strauss-Kahn's resignation, Europe has made clear it wants to stay in charge of the multilateral lender at a time when it is helping to bail out Greece, Ireland and Portugal.

“It's a European consensus,” Francois Baroin, France's budget minister and government spokesman, told Europe 1 radio. ”The euro needs our attention. We need to have the Europeans (on board), the Chinese support the candidacy of Christine Lagarde,“ he said.

But China's Foreign Ministry said it had no comment on whether Beijing would back Lagarde, a 55-year-old former lawyer, for the job.

Sources in Washington have said the United States would back a European, continuing a tradition that also allows an American to run the World Bank.

The United States and European nations jointly have power at the IMF to decide who leads it but securing support from some emerging economies would defuse a potentially bitter row over the decision.

The IMF's board will draw up a shortlist of three candidates and has a June 30 deadline for picking a successor.

Mexico's Carstens told Reuters the United States welcomed his participation in the race for the IMF job but was neutral on whether to support his candidacy.

”They welcomed that I was participating and they thought it was an important part of the process,” Carstens said.

Categories: Economy, International.

Top Comments

Disclaimer & comment rules
  • geo

    wanted a captain for sunked ship (IMF) !

    May 25th, 2011 - 09:00 am 0
  • sj_ken

    How much do the BRICs countries contribute to the IMF budget by amount and percentage of IMF funds?

    When the BRICs countries become major contributors to the IMF then they can have a larger say in who becomes the IMF president and how IMF conducts its policies.

    May 25th, 2011 - 09:49 am 0
  • NicoDin

    1- South Africa is not among the BRICs countries is member of the G20 who actually are complaining about the share of power over FMI having by Europe.
    2- Someone miss understood the news from Reuters which says:

    “Brazil, Russia, India, China and South Africa sharply criticized EU officials in a joint statement for suggesting the next International Monetary Fund head should be a European, a convention that dates back to the founding of the global lender at the end of the Second World War....”

    And below Reuters says: “However, the countries known as the BRICs (referring to Brazil, Russia, India and China) failed to unite behind a common alternative candidate, leaving the way clear for Lagarde unless she slips on a French legal case.”

    What its a complete different thing than “Brazil, Russia, India, China and South Africa, known as the BRICs, sharply criticized European officials on Tuesday for suggesting the next IMF head should automatically be a European.”

    @ sj_ken

    IMF quotas contributions are based on GDPs the 1st. contributor is US, the 2nd is China, the 3er is Japan, and then far away comes Germany and then Brazil, etc, etc, etc.

    And the BRICs made all together a GDP close to 11 trillions dollars.

    So the BRICs can bounce back the seat of the Chairman of the IMF with US easily

    : )

    May 25th, 2011 - 11:26 am 0
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