The EU has narrowed down its field of candidates to replace Christine Lagarde at the IMF to three names as European negotiators rush to secure a consensus on who should be the next managing director of the Fund.

On Friday, the French finance ministry — which is leading negotiations on behalf of the EU — shortlisted five European names for the job but failed to reach a consensus on any candidate.

Of the five, Mário Centeno, Portugal’s current eurogroup chair and Nadia Calviño, Spain’s finance minister, have now been ruled out, according to two senior officials briefed by French negotiators – leaving Jeroen Dijsselbloem, Kristalina Georgieva and Olli Rehn still in the race. 

The French finance ministry denied a decision had been taken. “Consultations are ongoing,” said a spokesperson for Bruno Le Maire, French finance minister. 

The IMF has set a deadline of early September for countries to nominate candidates. European negotiators have been spurred into action to find a replacement to replace Ms Lagarde wary that a failure to agree on a single candidate will introduce rivals for the position from large emerging markets. 

European nationals have dominated the leadership of the fund as part of an informal agreement where a US national takes the helm at the World Bank. The process to select the next managing director is expected to be completed on October 4. The vacancy has provoked a flurry of backroom diplomacy in the EU, which is determined to keep its claim on the job in the face of challenges from emerging markets like India, Brazil and China. 

But Europe’s negotiations have been bogged down by divisions between southern and northern eurozone countries who have objected to the next managing director coming from opposing camps. One diplomat said that France was positioning Ms Georgieva, a Bulgarian, to emerge as the compromise candidate. 

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Ms Georgieva, the Bulgarian chief executive of the World Bank, has been backed by France but her candidacy would require a change to IMF rule which prevent a managing director over the age of 65 applying for the job. Despite France’s push to the change laws, it has been resisted by a majority of EU countries. 

Mr Dijsselbloem is known to have the support of northern European capitals and Germany. The former Dutch finance minister was chair of the eurogroup of finance ministers during the height of the eurozone crisis and emerged as an early frontrunner in the race. 

Mr Rehn, a former Finnish EU commissioner for the economy and current head of Finland’s central bank, has a similar profile to Mr Dijsselbloem and is likely to get the backing of northern states. 

The absence of any candidate from southern Europe would suggest both Mr Rehn and Mr Dijsselbloem will not be blocked by opposition from the likes of Spain, Italy or Portugal who had voiced their opposition to nationals from traditionally hawkish eurozone states. 

Mark Carney, the Canada-born governor of the Bank of England, failed to win the backing of EU finance ministers earlier this month as capitals dismissed him for not being European enough, despite holding UK and Irish passports. 

Ms Lagarde will step down from her post in September; EU leaders picked the former French finance minister to become the next president of the European Central Bank last month. 

The board of the IMF has said it will appoint a managing director with a “distinguished record in economic policymaking at senior levels” with a “firm commitment to, and an appreciation of, multilateral co-operation”.

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Via Financial Times