That the most qualified person take charge of the IMF

Now that Christine Lagarde announced its resignation as Managing Director of the International Monetary Fund, the German Chancellor, Angela Merkelnotes that Europeans "still" have the "right" to occupy what may be the most important economic position in the world. Merkel invokes a decades-old political agreement that gives Europe the leadership of MFIs in exchange for allowing Americans to lead the World Bank.

If world leaders want the IMF to fulfill its mission of guaranteeing international financial stability, must put an end to this arrangement and choose the most capable person. They must also do more to depoliticize the institution.

Although Europeans have led the IMF since its inception in 1945, this conclusion has not always been drawn in advance. In 1955, the entity's shareholders offered the position to at least two non-European personalities: the Governor of the Bank of Canada. Graham Tours and C.D. Deshmukh, former Governor of the Reserve Bank of India and Minister of Finance for a long time. Later, in 1963, the settlement began.

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The political agreement did neither Europeans nor the world. Consider the role of the IMF in creating the euro. In 1997, Michel Camdessus, then Governor General of the Banque de France, then declared without any proof that the euro would generate a great economic reward. He approved the single currency by ignoring non-European members of the body's governing council and academic warnings like Barry Eichengreen. The US authorities, complicit in the settlement, have not opposed any resistance.

During the last European debt crisis, the IMF has not played an independent role either. Under the leadership of former French Finance Minister Dominique Strauss-Kahn, the fund has been aligned with the European plan to rescue the private creditors of the Greek government and impose dire budget austerity on the state, a decision made by Lagarde (also former French finance minister). ) back when he took office in the direction of the organization in 2011. In the Lagarde era, the IMF also did not sound the alarm when the European Central Bank has raised its key rate in July 2011, then snuggled in 2013 and 2014 while a psychology was installed. deflationary Throughout these terrible years, like Groundhog Day, the IMF has predicted from time to time that the euro area and growth will resume quickly, each time attributing the failure of these forecasts to factors "temporary".

Now Europeans threaten to anoint Lagarde's successor Jeroen Dijsselbloem, former Minister of Finance of the Netherlands. Dutch voters turned their backs on Dijsselbloem and his Labor Party in the March 2017 elections. His nomination would be a gift to the Social Democrats, who, while being a weakened force, cling to privileged posts . The main declaration of economic wisdom and diplomacy of Dijsselbloem is its famous advice to the governments and citizens of the countries of the south of the euro zone: "I can not spend all my money on alcohol and women, and then ask for it. ;help."

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Highly qualified non-European candidates are not lacking. Take Hyun Song Shin, Economic Counselor and Head of the Bank of International Settlements and Expert in Financial Markets and Systematic Risk, or Raghuram Rajan, an economist at the University of Chicago and former Governor of the Reserve Bank of India. Both represent countries gaining economic and political weight, but the global dialogue has been marginalized. Why not an American like Randall Kroszner, expert in banking regulation and former member of the board of governors of the Federal Reserve.

The IMF needs a manager of the highest caliber, chosen through an open competition, which is not clearly tainted by the national policy. It would only be the first step. The fund should also replace its deputy chief executives politically appointed by technocrats, also elected through a competitive process. This core team should be badisted by a board, in the manner of the Monetary Policy Committee of the Bank of England, composed of world clbad economists and monetary authorities.

With such a decision-making body, the IMF, supported by its exceptional staff, would have the credibility to take complicated steps in times of crisis and tell the truth to the authorities when badessing the national economic situation and World. Such a structure would allow the IMF's monetary policy recommendations to benefit from sound economic thinking that is not biased by the financial and political interests of the United States. and from Europe.

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To complete the structure, the IMF should get rid of the Board of Governors, which for decades has unequivocally endorsed the decisions made in Washington and in European capitals. Its members could serve as advisers and the fund's administration could periodically respond to them in order to make their decisions, in the same way that central bank governors appear before national legislative bodies.

The global economy is entering a new dangerous phase. Trade is not developing and China is slowing down. USA It leaves behind the effects of the tax benefits of President Donald Trump. The eurozone threatens to slow down and perhaps fall into a recession against which the ECB lacks firepower. Italy, the third largest economy in the eurozone, is still on the brink of a crisis that could have repercussions throughout Europe and beyond.

This is not the time to conclude another agreement behind closed doors. The IMF needs a fresh start.