Bank governor Mark Carney fails to make final cut for IMF job

The shortlist of European candidates to lead the International Monetary Fund (IMF) has been reduced to a handful of names, but Mark Carney has not made the final cut.

The Bank of England governor had been cited as a contender to take over from Christine Lagarde, who stands down as the fund’s managing director in September to move to the European Central Bank.

Despite being a previous bookies’ favourite, Carney is not on a shortlist drawn up by France’s finance minister, Bruno Le Maire, who is organising the process of selecting Europe’s candidate.

European countries will face a choice from a list that includes Jeroen Dijsselbloem, the former Dutch finance minister; Bulgaria’s Kristalina Georgieva, number two at the World Bank; Olli Rehn, the head of Finland’s central bank; Portugal’s Mario Cénteno, chair of the Eurogroup of finance ministers; and Spain’s finance minister, Nadia Calviño.

The French finance ministry on Monday denied reports that Cénteno and Calviño had been cut from the shortlist.

Despite reports that George Osborne was interested in the job, one European diplomat said the former UK chancellor and current editor of the Evening Standard had “never been a candidate”.

By longstanding agreement, Europe chooses the head of the IMF while the US picks the leader of the World Bank, although that Bretton Woods-era convention is increasingly questioned by the rest of the world. The IMF wants countries to nominate candidates by early September, with the aim of naming Lagarde’s replacement the following month.

The IMF lends to troubled economies and played a crucial role in the eurozone crisis, as part of the so-called troika – of the IMF, European Central Bank and European commission – that oversaw bailouts of Greece, Portugal, Ireland, and Cyprus.

Georgieva, a former European commissioner, is seen as France’s choice. The 65-year-old can only succeed if the IMF scraps an age limit that means its managing directors are appointed before their 65th birthday.

Dijsselbloem, an ex-head of the Eurogroup who once said indebted EU countries had wasted money on “drinks and women”, would have to overcome doubts in southern Europe about his economic approach.

Rehn, a former European commissioner for the euro, has been Finland’s central bank governor since 2018. He is likely to compete with Dijsselbloem for the backing of north European countries.

Cénteno and Calviño complete the list.

Carney is Canadian by birth but has British and Irish passports. However, there is doubt whether that will ever be enough for him to be considered as “European” in this race.

Europe hopes to unite around a candidate at the end of the summer, shortly before Lagarde’s official departure on 12 September. The outgoing head of the IMF has already ceased to make speeches and policy pronouncements, since her appointment this month as the first woman to lead the European Central Bank.

The new managing director will be expected to oversee a change in approach by the IMF, which has been criticised in the past for imposing spending cuts on governments facing financial crises. The Fund came in for particularly fierce criticism during the Greek bailout.

However, one of Lagarde’s last acts as IMF head was to announce a shift in policy. She said the IMF would now urge countries to protect spending on health, education and vulnerable groups amid growing concern among its members about excessive levels of inequality.

Source: The Guardian weekly

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