IMF: Does the person or institution weigh more?

Christine Lagarde has applied for a temporary license from the IMF, where she has been managing director since mid-2011, because she wants to chair the European Central Bank (ECB). As the probability that he will succeed is very great, we, the Argentineans, ask ourselves the following question: given the "metejón" that Mrs. Lagarde has shown for the economic program to which Argentina is confronted; What consequences can it have for us if its replacement does not share this feeling?

In this regard, I consulted the Dutchman Hendrikus Johannes Witteveen (1921-2019), who worked in his country under the orders of Jan Tinbergen and Frederic Lodewijk Polak. Before joining the IMF, he was Senator and Minister of Finance of the Netherlands. Between 1978 and 1985, he was the first president of the group of 30.

-You were Director General of the IMF between September 1973 and June 1978.

-C is like that. Let's do a little bit of history. Including Ms. Lagarde, who is over 70 years old, 11 people have held this position. I was the fifth. An unwritten agreement stipulates that the president of the World Bank, also created in 1944, is an American and the IMF director general is European. Until now, the position was exercised by 5 French, 2 Swedes and a German, Belgian, Spanish and myself citizen, originally from Holland.

-The minute agenda had to face.

– effectively. By the early 1970s, the so-called gold standard exchange system had been abandoned, which added to the clbadic gold standard the possibility that US dollars would be considered reserves by central banks and banks. as soon as possible. The accusation took place during the first oil shock. As a result, we have had to "reinvent" the role of the Fund to a large extent, for example by setting up "oil facilities".

– The current fund is another fund, also from the point of view of its visibility.

-C is like that. In my day, politicians and technicians spoke to the two natural interlocutors of each of the member countries: the Minister of Economy and the President of the Central Bank. Michel Camdessus, this has changed considerably, with its advantages and disadvantages

– What is the probability that the tradition is broken and that a non-European replaces Mrs. Lagarde?

-I have heard that there is a Mexican and an Indian among the candidates. I do not know, this will happen maybe I badign a low probability.

– What does Christine Lagarde earn from the IMF to the ECB?

-We should ask him, but remember, as well as Armen Albert Alchian said, everything we observe is optimal for those who have to make the decision. Suddenly, he felt that he had nothing else to achieve at the Fund and that he did not want to go home either.

As you know, since 2018, Argentina has again reached an agreement with the IMF. In view of the enthusiasm shown by Mrs Lagarde with regard to the economic policy proposed by President Mauricio Macri and the ease with which the country could, on several occasions, modify the original agreement; How far could it continue with his successor?

-The relative importance of individuals and personalities in relation to circumstances and institutions raises an eternal debate between historians, as there are examples from one side to the other.

-List us, please.

-We are going to extremes. On the one hand, there is little doubt that England's position during the Second World War would have been the same whether the office of Prime Minister had been entrusted to Winston Churchill or had been entrusted to Neville Chamberlain . Something similar, although less decisive for the outcome of the war, was the role played by Charles De Gaulle.

-Give me an example of the opposite extreme.

– No one can believe that if Archduke Franz Ferdinand had not come to Sarajevo on June 28, 1914, the First World War would not have broken out, because there were sparks everywhere and, therefore, it was only a matter of time. Acting from his country, the United States ambbadador to his country, Juan Domingo Perón, and Spruille Braden, was the "dessert dessert" of an old tense relationship. a half-century.

-Concentrate yourself in the case that concerns us.

-I would say, without being in the "kitchen" of the institution today, that in this case, the importance of people will not be decisive. First of all, because what Argentina has achieved does not come from the IMF, as an autonomous entity, but from the obvious relationship that Presidents Macri and Trump have today. Second, no less important, because the agreement is already in force and Argentina has received the bulk of the funds committed.

Can we sleep peacefully, then?

-I would not advise, as I do not advise anyone. In particular, the political honeymoon should never replace the technical soundness of an economic program. Because if the political wind changes, a technically flawed program will show its flaws, and because even without changing political preference, no one can base his actions on foreign aid.

-Don Enrique, thank you very much.

IN ADDITION