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France plans to lend support to Kristalina Georgieva when the 24 members of the IMF’s board meet on Friday to assess whether they should retain the fund’s managing director following allegations questioning her ethics in her previous post at the World Bank.
But it was not clear on Thursday whether Paris’ backing would help influence other European countries to settle a controversy that hangs over the multilateral lender over the past three weeks and threatens to cloud the IMF and the annual rally. from the World Bank in Washington DC starting Monday.
Several EU countries and the UK were awaiting an indication from the Biden administration as to whether Georgieva had lost US support, according to people familiar with the board discussions.
“The fact that the board took five hours (Wednesday) and didn’t give clear direction shows you how divided they are on this issue,” a former senior IMF official said. “For questions concerning the CEO, they try to find a consensus as close as possible. . . I’m sure they want to put this behind them before next week, but it seems to be very difficult. “
Georgieva said in a statement on Thursday that she looked forward to “a swift resolution of the matter in a manner that preserves the core strengths of the IMF and the World Bank as strong multilateral institutions that fulfill their important missions in these time of unprecedented crisis. “
Georgieva is accused of manipulating data in favor of China in the 2018 edition of the World Bank’s widely followed annual Doing Business report while she was CEO of the bank, a post she left for the job highest at the IMF in October 2019. She denied any wrongdoing. and dismissed the charges, a line of defense she reiterated to council on Wednesday.
The allegation was made in a report commissioned by the World Bank’s board of directors from law firm WilmerHale, which met with the IMF’s board on Monday.
The bank’s board of directors made the decision to release the report on September 16, hours after the bank announced it would end the Doing Business report due to ethical concerns about the conduct of former members of the board of directors and former employees involved in its preparation *.
Apart from Paris, the Hungarian finance minister also spoke in favor of Georgieva this month, saying that “the attacks on her have a political context which has no place in international financial institutions”. Last weekend, a public relations agency retained by Georgieva released a statement of support from finance ministers from 16 African countries.
Asked about this at the end of last week, Kristina Wogatzki, spokeswoman for the German Ministry of Finance, said: “Consultations are currently underway at the IMF. As you know, Mrs Georgieva is the current Director of the IMF and as such she has the opportunity to make a statement. Germany will not prejudge this.
A key question hanging over EU capitals is where Joe Biden and US Treasury Secretary Janet Yellen stand. Washington holds the most influence in the IMF, given the United States’ 16.5 percent share of the voting power in the fund.
“Until the Americans take a stand, there are a lot of people sitting on the fence,” said a person familiar with the talks.
On Wednesday, a Treasury Department spokesman declined to say whether the United States supported Georgieva’s leadership of the IMF after this week’s board meetings, noting that the Treasury had advocated “full accounting and just all the facts ”.
The Treasury declined to comment further on Thursday.
The IMF’s intention is to resolve the matter at the board level ahead of the fund’s annual meetings next week, a person familiar with the fund said. But a former IMF official said that could be an elusive ambition.
Georgieva’s departure would create a political headache in Europe, which has always claimed the post – as Washington traditionally appoints the head of the World Bank.
The Bulgarian economist took over from Christine Lagarde two years ago after a fierce battle between European capitals. His appointment forced the IMF to remove the age limit specified in the fund’s statutes for the post.
But if it remained, the credibility of the fund would be “strongly diminished”, warned Anne Krueger, former first Deputy Managing Director of the IMF.
“The whole work of the institution will be devalued. This prospect alone should be enough for the political leadership of the IMF to find a new managing director whose commitment to labor integrity is not in question, ”she wrote Thursday in Project Syndicate.
Additional reporting by Victor Mallet in Paris
*This story has been edited to clarify that the concerns were with former board representatives.
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