EU pushes Bulgarian for top job at IMF

But move has raised doubts about European domination of governance

The European Union has decided to put forward World Bank official Kristalina Georgieva as their candidate to replace Christine Lagarde as head of the Washington-based International Monetary Fund. But the move has raised doubts about the European domination of the organization that fosters global financial stability.

The EU's nomination of Georgieva, a Bulgarian economist, came after two days of negotiations and two rounds of contested votes in a selection process led by French Finance Minister Bruno Le Maire. Other candidates include former Dutch finance minister Jeroen Dijsselbloem, Portuguese Finance Minister Mario Centeno, Bank of Finland Governor Olli Rehn and Spanish economy minister Nadia Calvino.

If approved by IMF's board in October, Georgieva would be the first East European to head the organization. All 11 IMF chiefs since 1946 have been West Europeans. Under an informal agreement between Europe and the United States, the World Bank is headed by a US citizen and the IMF by a European. Together, they control 46 percent of the IMF vote.

"Ms Georgieva certainly has strong credentials in the world of international finance and is likely to do a competent job managing the economic and political challenges the IMF faces," Eswar Prasad, a professor at Cornell University and a former chief of IMF's China Division, told China Daily on Monday.

"However, the process of her nomination, which was orchestrated by a set of advanced European countries, still reeks of a global governance system that is dominated by advanced economies who put their interests first."

Prasad said the outcome points to the lack of unity among emerging market economies, whose competing interests and lack of cooperation have yet again prevented them from mounting a cohesive challenge to the existing international order.

The IMF board of directors would need to change its rules to let Georgieva succeed Lagarde, who resigned last month to take the job as president of the European Central Bank. Managing directors are now required to take office before turning 65; Georgieva will turn 66 on Aug 13.

Ferdinando Giugliano, an editorial board member of Financial Times, wrote on Monday on his Twitter that Georgieva "is a strong contender to head the IMF, but Europe has no divine right to this post".

"There should be other candidates - from Mark Carney to Tharman Shanmugaratnam - and the IMF board should simply pick the best." Carney is the governor of Bank of England and holds Canadian, British and Irish citizenships while Shanmugaratnam is chairman of Monetary Authority of Singapore.

In a Bloomberg column on Monday, Giugliano argued that the world economy is changing as Europe's share of global income continues to fall. "At a fraught moment for international politics and economics, the IMF needs the best possible head regardless of where she or he comes from. A selection based truly on merit is far better than an anachronistic America-European stitch-up," he wrote.

Writing in The Guardian newspaper on Monday, Amanda Khozi Mukwashi, chief executive of Christian Aid, a relief and development agency in UK and Ireland, said that the new IMF chief should not be chosen by Europe alone.

"As the world becomes ever more politically polarized and vulnerable to populist leadership, and as the US turns away from multilateralism and takes a skeptical approach on the climate crisis, there is all the more reason for these major institutions - which are so keen to boast of their globalist credentials - to take an inclusive, merit-based approach to what ought to be a diversified recruitment process," she wrote.

"The coming window for new leadership is an opportunity for the IMF to demonstrate a different model that is democratic and -crucially - inclusive of candidates from the global south. IMF, like the World Bank, needs to modernize, or it is in danger of outliving its usefulness to the world," she said.

The European Commission does not have a formal role in the selection of an IMF chief, but spokeswoman Mina Andreeva said at a news conference in Brussels on Friday: "We do support the nomination of a European candidate, who can make an effective contribution to the IMF's global mission of maintaining the stability of international economy."