Argentina’s best ally at the IMF against the ropes: today they will debate its possible resignation and Europe seems divided on its continuity

Europe appears divided around the continuity of the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, whose future will begin to be decided today. Argentina will pay close attention to this debate, a few hours before the start of the organization’s annual meeting.

The speed of a definition will depend essentially on two questions: the position of the American Treasury led by Janet Yellen and the possibility that Europe unites the positions around a possible replacement, since it is traditionally responsible for leading the multilateral body. .

“The question is not so much the future of Georgieva, but whether the future of the IMF if it continues without being declared innocent. It’s more and more complicated and I think it has lost its credibility with the staff; it’s going to be expensive to manage ”, A former Argentine representative to the Fund told Infobae.

In this regard, the Financial Times reported that “France plans to support 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 his previous position at the World Bank. “

However, Germany and Britain maintain their doubts and the United States seems closer to forcing their exit.

In this regard, the FT noted that it is not clear “Si el apoyo de París ayudaría a convencer a otros países europeos para resolver una controversia que se ha cernido sobre el prestamista multilateral durante las últimas tres semanas y que amenaza con enombrecer la reunión anual del FMI y el Banco Mundial in Washington DC que comienza el On Monday”.

“Several EU countries and the UK were awaiting any indication from the Biden government as to whether Georgieva had lost US support, according to people with knowledge of the board discussions.”

“The fact that the board took five hours (Wednesday) and did not give clear direction shows how divided they are on this issue,” noted a former IMF official.

“For matters relating to the CEO, they try to reach as close a consensus as possible. I’m sure they want to put this behind us before next week, but it seems very difficult, ”he added, referring to to the Argentine government’s best ally at the IMF.

At the same time, Georgieva said in a statement on Thursday that she hoped for “an early settlement of the matter in order to preserve the strengths of the IMF and the World Bank as strong multilateral institutions fulfilling their important missions in these times of unprecedented crisis. “.

The Bulgarian economist was accused of manipulating data in favor of China in the 2018 edition of the World Bank’s much-followed annual Doing Business report while she was CEO of the bank, a position she held. left for the most senior IMF position in October 2019..

Georgieva has denied wrongdoing and dismissed the allegations, a line of defense she reiterated to council on Wednesday. The accusation appears 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 stop releasing the Doing Business report due to ethical concerns about the conduct of the former board of directors.

Besides Paris, “Hungary’s Economy Minister also spoke out in favor of Georgieva this month, saying the attacks on her have a political connotation that has no place in international financial institutions.”

On the other hand, last weekend, “a public relations agency contracted by Georgieva issued a statement of support from the finance ministers of 16 African countries.” Asked about the matter at the end of last week, Kristina wogatzki, a spokeswoman for the German Ministry of Finance, said: “Consultations are currently underway at the IMF. As you know, Georgieva is the current director of the IMF and in this position she has the opportunity to make a statement. Germany will not anticipate it ”.

The Argentine government had no official opinion, although Minister Martín Guzmán defended the progress made with Georgieva a few days ago.

A key question hanging over EU capitals is “the position of Joe Biden and the US Treasury Secretary, Janet Yellen, since Washington has the greatest influence within the IMF, given that the United States has 16.5% of the voting rights in the Fund ”.

“Until the Americans speak out, there are a lot of people sitting on the sidelines,” a source familiar with the talks said.

A few hours ago, a Treasury Department spokesperson declined to say whether the United States supports Georgieva’s leadership at the IMF after this week’s board meetings, noting that the Treasury had been pushing for a “full and fair account of all the facts”.

The IMF’s goal appears to be to resolve the issue at the board level ahead of the fund’s annual meetings next week, a source close to the fund said. However, a former IMF official said that could be an elusive goal.

In this regard, Georgieva’s departure would generate a political headache in Europe, which has always claimed the post, while Washington traditionally appoints the head of the World Bank. If it remains, the credibility of the Fund will be “greatly diminished”, he warned. Anne Krueger, former first Deputy Managing Director of the IMF, who was very hard on Argentina after the exit from convertibility.

Meanwhile, the minister Martin guzman packing his bags to leave for Washington on Sunday, where he’s scheduled to meet Georgieva and the staff they lead Julie kozack and Luis Cubeddu, to negotiate a new agreement which allows the country to refinance its debt of 45,000 million dollars over 10 years, a mission which will not be easy either because of the requirements it implies, or because of its relative weakness, which adds to the uncertain future of the Fund’s number one. With or without Georgieva, the IMF will demand from the government a coherent and achievable economic plan, as expressed by the U.S. Treasury and its staff, which poses an additional challenge given the broad disagreements that exist within the governing coalition over the economic trajectory after the November elections.

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