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Europe down to two candidates to replace Lagarde at IMF

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EU finance ministers are taking part in a close-fought vote to choose their nominee as Christine Lagarde’s successor at the International Monetary Fund, as the UK considers whether to put forward George Osborne in a bid to break the looming deadlock.

Jeroen Dijsselbloem, the former chair of the eurogroup of EU finance ministers who has the support of Germany, is facing off against Kristalina Georgieva, the Bulgarian World Bank chief executive who is backed by Paris, in a vote on Friday afternoon.

Due to longstanding convention a European national leads the Fund while an American national heads the World Bank. But national capitals have struggled to reach a consensus and the rounds of voting by EU finance ministers are a controversial bid to break the impasse that has divided the eurozone’s southern and northern states.

The British government told the EU it does not approve of the process and the UK abstained in Friday’s votes, according to a senior EU official. British officials argue that there is no immediate rush, as nominations do not close until September.

UK prime minister Boris Johnson is considering putting forward George Osborne, the former chancellor, whose candidature had seemed doomed to failure because of the likelihood that the remaining 27 EU member states would coalesce around a favoured candidate.

Now Mr Osborne is seen in London as a potential compromise candidate who might be acceptable to Paris and Berlin: the former chancellor was popular among EU finance ministers and resisted David Cameron’s plan to hold an EU referendum.

“The real deadline is in September,” said one UK official. “We haven’t decided yet whether to put forward a British candidate, but we might. We will see how it progresses over the coming days and weeks.”

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Meanwhile national capitals engaged in furious phone-call diplomacy on Friday afternoon to rally behind the two remaining EU candidates. Officials said the centre-left government of Pedro Sanchez in Spain would vote for Mr Dijsselbloem — a Dutch socialist — overcoming Madrid’s previous opposition to his candidacy. Italy has said it will support Ms Georgieva.

A conference call for EU ministers on the outcome of the vote is expected early this evening.

Two other candidates — Olli Rehn, Finland’s central bank governor, and Nadia Calviño, Spain’s finance minister — bowed out in previous voting rounds. Ms Calvino withdrew after a first round of voting; after the second round, Mr Rehn withdrew. Mário Centeno, the current eurogroup chief, said late on Thursday that he would not take part.

Writing on Twitter, Mr Rehn said: “It is an exceptionally meaningful and motivating job. However, at this stage I withdraw my name from the ballot, so that we can achieve a broad-based consensus for the European candidate, and worldwide support.”

Mark Carney, the Bank of England governor, made a pitch for the job on Friday morning, saying it was “extremely important” — but he does not have the backing of any major European government.

Mr Carney has been praised by the international economic community but was dismissed by EU capitals for not being “European enough”; a Canadian citizen, he also holds British and Irish passports.

In an interview on the BBC Today programme on Friday morning he declined to rule out running for the role. 

Speaking about his planned departure from the BoE at the end of January, Mr Carney said: “I wouldn’t mind doing something when I leave . . . [the IMF] role is extremely important.”

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“It is a time of consequence for the global economy, whether it’s addressing inequalities, adjusting to a lower carbon global economy, helping to get the world out of this very low interest rate, low inflation, low growth trap that we’re in, the fund can play an important role,” he said.

Via Financial Times

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