News of Europe. World’s news media have informed that on Thursday, May 19, the managing director of International Monetary Fund Dominique Strauss-Kahn, who is currently under arrest in New York, announced his intention to quit his post. This step of the influential financial expert could be easily predicted. Expert community had no doubts about imminent resign of the present head of IMF from the moment of his custody in Kennedy airport.
American Finance Minister Timothy Geitner has long been appealing to the board of governors of the fund to appoint an interim head of this very authoritative financial organization. The post is currently occupied by John Lipsky, also American that is the second person in the fund (after Strauss-Kahn). It is worth mentioning that US representatives form the majority in IMF, as 16% of votes in the organization belong to them. If to take into consideration that Dominique Strauss-Kahn was “knocked down” not without Americans’ help, as well as their unusual activity in choosing the new head, it can be supposed that in the nearest future IMF will possibly face drastic changes.
When and how will the elections s take place?
Western Europe community analytics of Masterforex-V Academy pay attention to the fact that it was already on Thursday that the board of governors of the fund started discussing organizational questions concerning the new head’s elections and run candidates:
• the question about the new managing director of International Monetary Fund can be regarded during the summit of the "Group of Eight", which is going to take place on May 26-27 in a French town Doville. However, leaders of G8 can only reach certain agreements. All IMF members have to participate in elections the fund’s head;
• “the governors of the fund (who are going to elect the head of IMF) have reached the conclusion that the electing process has to be open and clear, whereas the candidate’s achievements are to be the criteria for this. When we say an “open process”, this means that it is open for everybody, but not for certain people”, said John Lipsky, meaning that everybody who deserves this will be able to take part in the elections (despite geography);
• representatives of 187 states are members of International Monetary Fund, each of the state having a quota that corresponds to its economic potential. Therefore, the largest representation in IMF belongs to the USA and the countries of Euro zone;
• that is the way that, according to an unwritten tradition, the post of IMF head in the majority of cases goes to Europeans, whereas Americans reserve the post of the head of the World Bank;
• people are also used to the fact that IMF head’s elections s bear a solely formal character, as their result is predetermined. In 2007 Dominique Strauss-Kahn was elected on almost a single bidder basis;
• the shares of the countries’ with advanced economy (USA, France, Great Britain, Germany) votes are so big that they can easily block any unwanted candidate. Therefore, in order to avoid misunderstandings, member states have always preferred to agree on the future leader’s candidature in advance.
What will change now?
The nearest elections promise to become real, maybe even open and democratic. The procedure is to be freed from any possible agreements behind the curtains. What is the reason of such drastic changes in the “quiet kingdom” of IMF. First of all, this was caused by the following factors:
1. Increased influence of the countries with dynamically developing economy (China, India, Russia, Brazil, RSA).
2. The desire of the USA to slightly alter the rules of the game under the guise of their improvement.
In other words, they started thinking that their constantly increasing dues to the fund give them the right to pretend for real voting power and more influence on the process of decision making. Others (Americans) desided to support them in this. It is for this reason that at the nearest elections more than one or two candidates will be run. It is also obvious that not all wishing to will represent the Old World.
What are the candidates for the post of the new head of IMF?
Experts suggest several names:
1. Finance Minister of France Christine Lagard, who is currently the recognized as the front-runner.
2. Chief Executive Officer of Deutsche Bank Josef Ackermann.
3. Former head of German Ministry of Finances Peer Steinbrueck.
4. Former head of Bundesbank Axel Weber.
5. Former Prime Minister of Great Britain Gordon Brown.
6. Former Finance Minister of RSA Trevor Manuel.
7. An outstanding Turkish financial expert Kemal Dervis.
8. Finance Minister of Singapore Tharman Shanmugaratnam.
9. Governor of Mexico Central Bank Agustin Carstens.
10. Governor of National Bank of Kazakhstan Grigory Marchenko (supported at the Council of CIS Heads).
Who supports a European as the candidate?
Certainly, Europeans, who are determined and firm about this:
• German Chancellor Angela Merkel was the first to claim that “there are serious grounds” to appoint a European the new IMF head, for Euro zone is well known to him as a region that has certain debt problems;
• Finance Minister of Belgium Didier Reynders has also spoken against the breakage of the established tradition. “It is more preferable to leave things as they are,” he claimed;
• the same opinion was expressed by the Prime Minister of Italy Silvio Berlusconi;
• treasury (Ministry of Finance) of Great Britain has also officially supported this point of view. However, very recently, this April, the Prime Minister s David Cameron poke in such a vein that, in order to strengthen its global positions, the fund shall look “beyond Europe, into other regions of the world”. In this reference, two aspects are interesting. Firstly, London has lately only been repeating Washington’s opinion; consequently, it is not hard to guess “which way the wind is blowing” concerning the candidate from third world countries. Secondly, why already in April did Cameron speak about a possible successor of
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