IMF Head Likely to Get Europe’s Backing for Decision on Her Future
(Bloomberg) -- European governments are leaning toward backing IMF Managing Director Kristalina Georgieva as the lender’s board prepares to make an imminent decision on her future after allegations of improper actions during her stint at the World Bank, according to European officials.
A French finance ministry official said a review of the case by law firm WilmerHale didn’t provide details on precise elements to call Georgieva’s conduct directly into question, which is why France has supported her.
Another European official, who asked not to be named, said countries including France and the U.K. are among those still behind the IMF chief because they don’t see clear evidence against her.
The executive board, with 24 directors representing 190 member nations, is racing to reach a decision as soon as Monday to prevent the crisis from inflicting any big damage on the International Monetary Fund’s credibility as a global lender. Talks with WilmerHale Sunday afternoon lasted several hours, according to a person familiar with the matter who spoke on condition of anonymity.
Politics will play an important role on how the chips fall for Georgieva, and the outcome will likely hinge on how much European support she ends up receiving in case the U.S. decides to push for her ouster.
Bloomberg reported last week that U.S. Treasury officials were debating whether the Biden administration should ask the Bulgarian national to step down on ethical grounds. A Treasury spokeswoman has said the department will make a decision once the review is completed.
While the U.S. is the IMF’s largest shareholder, France has traditionally had a big say in who gets to be managing director. Five IMF chiefs have been French, and even when the country didn’t secure the top job, it played a pivotal role in determining who did.
A U.S. decision to challenge France over IMF leadership has the potential to reignite tensions between the nations after a recent rift over a U.S. defense pact with the U.K. and Australia that involved Australia scrapping a multibillion-dollar submarine contract with France.
IMF board members are discussing an audit that the law firm did for the World Bank, based on a review of 80,000 documents and more than 30 interviews.
The review accuses Georgieva of pressuring staff to manipulate data for the annual “Doing Business” report to benefit China when she was a top official at the development lender. Georgieva, who joined the IMF in 2019, has repeatedly denied any wrongdoing.
France wants the decision on the managing director’s future to be taken very soon, the finance ministry official, a position also shared by Germany.
What would make Europe’s task in defending Georgieva more difficult is if more damaging details were to emerge, making her a political liability, according to two Italian officials who said their government so far backs the managing director.
©2021 Bloomberg L.P.