The International Monetary Fund leadership is not a bargaining counter

by Adam Tooze – July 22, 2019

Social Europe

In the grand European political reshuffle of 2019, it turned out that Christine Lagarde was the answer to the conundrum of who should replace Mario Draghi at the European Central Bank. But her move opens another question. Who succeeds Lagarde at the International Monetary Fund?

The question is a European question because, as part of the founding compromise of the Bretton Woods institutions in 1944, the United States nominates the head of the World Bank and the position of managing director at the IMF is taken by a European. America’s interest at the IMF is secured by its blocking position as the largest individual shareholder and since the 1990s by the nomination of the first deputy managing director. Today that role is occupied by David Lipton, who is currently filling in for Lagarde.

So far, even in an age of growing international tension, that basic distribution of spoils has held up. When Jim Yong Kim abruptly announced his departure from the World Bank in January 2019, the Trump administration nominated David Malpass as his successor. Despite his reputation as a critic of the bank, in April Malpass was elected unanimously and unopposed. No one wanted to add to the simmering tension with the White House.

Now, having rolled out the red carpet for Lagarde, the Europeans are mobilising to complete the reshuffle by nominating one of their own for the IMF.

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