Hanging on

Forced to resign as chief of the International Monetary Fund following his arrest in New York on charges of attempted rape, Dominique Strauss-Kahn leaves his succession for the IMF post wide open. Since its creation in 1945, the position of Managing Director has been attributed to a European in exchange for appointing an American at the head of the World Bank. A gentlemen’s agreement that was justified by the economic weight of each bloc at the time but which, for some, is no longer relevant today given the growing importance of the BRICS (Brazil, Russia, India, China and South Africa) and Europe’s political and economic decline. A chorus has thus arisen in favour of candidates from South Africa, Singapore as well as Israel and China, claiming that the time is right for new blood.

This is a legitimate claim because the emerging countries are under-represented in international organisations. At the IMF, for example, the BRICS account for 11.06% of voting rights while representing 20% of global GDP. Europe accounts for 35.6% of voting rights and just over 30% of global GDP (the United States represents 16.08% of voting rights and nearly 30% of world GDP). If the voting rights/economic weight ratio is unfair to the BRICS, and if a reform is desirable, it is nevertheless true that Europe constitutes the most influential bloc within the IMF.

There is therefore no reason for Europe to give up the fight to maintain control of this very strategic post, especially at a time when several European countries have been or are still negotiating aid packages. But for this to happen Europe must, once again, speak with a single voice and propose the candidate that best defends its interests. If Europe wants to avoid having the IMF once again appear as the baleful guardian of free-market orthodoxy, it had best choose a candidate possessed of sensitivity and creativity so as to diminish, as much as possible, the bitter taste of the medicine it will have to administer.