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Kristalina Georgieva moves step closer to IMF top job

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The IMF has backed the scrapping of a longstanding age restriction preventing its new managing directors from being 65 years or older, clearing the way for Bulgaria’s Kristalina Georgieva to succeed Christine Lagarde. 

The fund’s executive board of directors on Wednesday will recommend a motion to remove the age limit from the IMF’s internal bylaws, according to people familiar with the matter.

The final decision, should it be approved by the fund’s board of governors in the coming weeks, will overcome the biggest obstacle to Ms Georgieva’s candidacy after she emerged as the EU’s pick for the job after a divisive voting contest held in European capitals earlier this month. 

As part of a longstanding convention, a European national has taken the helm of the IMF while a US citizen has led the World Bank. The deadline for IMF hopefuls to enter the race to become managing director closes on September 6. Officials said the IMF’s governors would hold a vote to approve the scrapping of the age law change before that date. 

Ms Georgieva, current vice-president of the World Bank who turned 65 this year, defeated rivals including the Netherlands’ Jeroen Dijsselbloem and Finland’s central bank chief, Olli Rehn. Her candidacy was heavily supported by the French government which has lobbied European capitals and the US government to eliminate the age cap. 

Kristalina Georgieva

© Bloomberg

Currently: chief executive of the World Bank

Ms Georgieva has been CEO of the World Bank since the beginning of 2017 and served as interim president after Jim Yong Kim unexpectedly resigned in January. She was passed over for the permanent posting in favour of the US candidate David Malpass.

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The Bulgarian national has a long history of working at multilaterals, serving at the European Commission and the UN. She first joined the World Bank in 1993 as an environmental economist and has worked for the organisation across Asia and in Russia.

Unusually for an international organisation, the IMF has imposed an age restriction on its managing directors since 1951. A statement to be released by the Fund on Wednesday will say that removing the bylaw will bring the IMF in line with other Bretton Woods institutions like the World Bank which do not impose age limits on their chiefs. 

“Eliminating the age limit would bring the managing director’s terms of appointment into line with those of members of the IMF executive board, which the managing director chairs, and those of the president of the World Bank Group,” according to a draft statement seen by the Financial Times.

To finalise the move, the fund’s board of governors will need to back the change by a simple majority from a minimum of two-thirds of voting countries before September 4. 

The decision to remove the restriction was backed by an overwhelming consensus of countries, according to a fund official, suggesting that it did not meet opposition from major European capitals or the US. To appoint the managing director, the IMF’s governors will vote on the final list of candidates by October 4. 

Ms Georgieva, an internationally respected economist and former EU commissioner is a frontrunner to succeed Ms Lagarde at the fund and has won plaudits for her performance at the World Bank. EU officials have suggested that should the restriction stay in place, Mr Dijsselbloem could re-emerge as Europe’s selection. 

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The UK government, which did not take part in the process to vote for a single European candidate, is considering putting forward George Osborne, former chancellor. But to have any chance of winning the job, Mr Osborne’s candidacy would require the support of major non-EU economies, including the US.

Via Financial Times

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