IMF head: Europe to make 'common choice' soon

John Lipsky says the IMF will deal with the leadership issue "expeditiously"

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Germany's finance minister says Europe will decide soon on a common candidate as its choice to lead the IMF.

"We need a common European candidate and we are looking for the one who is best qualified and has the best chance," said Wolfgang Schaeuble.

A division has opened between the developed and developing world over who should replace Dominique Strauss-Kahn, who has resigned.

Emerging powers are keen to break Europe's traditional hold on the post.

Mr Strauss-Kahn stepped down after being charged with sexual assault and attempted rape, charges he denies.

He is expected to leave jail on bail later on Friday and be placed under round-the-clock house arrest.

Proposal

Mr Strauss-Kahn was the fourth Frenchman to have held the IMF's top job.

Another French national, finance minister Christine Lagarde, is seen as the favourite to be the next IMF managing director, and has been praised for her credentials by the interim head of the IMF, John Lipsky, the Italian government, the Swedish finance minister and Jean-Claude Juncker, who chairs the eurozone committee of finance ministers.

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If Europe can get the Americans on their side, then another European will replace Strauss-Kahn”

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Germany has not put forward any suggested candidate and Mr Schaeuble said it had "not given up on presenting a candidate of its own", but he said it was in favour of European countries taking a joint decision on whom to present.

The country's chancellor, Angela Merkel, suggested that Ms Lagarde would be an acceptable choice, telling a Berlin news conference: "Among the names mentioned for the IMF succession is French Minister Christine Lagarde, whom I rate highly."

European leaders are thought to be eager to decide on a mutually acceptable choice ahead of a summit of the G8 next week in Paris.

Power shift

In order to be considered for the role of managing director of the IMF individuals must be proposed by one of its 187 member countries. The appointment is made by the organisation's 24-member executive board.

Aside from Ms Lagarde, a number of other European names are being mooted as possible candidates, including the former UK prime minister, Gordon Brown, who played a prominent global role during the financial crisis.

He will have to get backing from elsewhere as the current UK prime minister has indicated that he will not propose Mr Brown.

The former UK prime minister is on a visit to South Africa, but he said he was not there "to pitch for a job".

"Any candidate to head the IMF needs to be appointed on merit," Mr Brown told BBC News.

The US has not yet indicated who it might favour.

Europe, together with the US, have almost 50% of the votes and have followed unwritten agreement to vote together, something that has meant all 10 of the IMF's managing directors have been European.

That is something that many believe is no longer appropriate as the balance of economic power shifts to the developing world.

The head of the Organisation for Economic Cooperation and Development, Angel Gurria, said on Friday: "It's time to change something which is a tradition, not a rule or a law."

South Africa, Thailand and Russia have all also said the new head should come from the developing world.

Singapore's finance minister, Tharman Shanmugaratnam, has attracted support from both the Philippine finance minister and his Thai counterpart.

Another potential candidate from developing countries is South Africa's Finance Minister, Trevor Manuel.

However, Turkey's former Minister of Economic Affairs, Kemal Dervis, who was accredited with saving the country from a financial crisis in 2001, has ruled himself out of contention.

Because of his nationality, Mr Dervis had been seen as a compromise candidate between Europe and developing countries.

Possible IMF successors

IMF frontrunners

There is a range of possible contenders for the top job at the International Monetary Fund. Find out about some of them

Christine Lagarde

Christine Lagarde

French finance minister

France

French Finance Minister Christine Lagarde, 55, looks like the leading candidate with backing from France, the UK and Germany. A flawless English speaker, she was voted best finance minister in Europe by the Financial Times in 2009. However, her nationality may count against her as several IMF chiefs have been French.

Agustin Carstens

Agustin Carstens

Governor Bank of Mexico

Mexico

Mr Carstens, 52, is to be nominated by the Mexican finance ministry. He has spent most of his career as an economic policymaker in his home country, becoming governor of the Bank of Mexico in January 2010 after previously serving as the bank's chief economist. He had a successful stint at the IMF from 2003 to 2006.

Trevor Manuel

Trevor Manuel

Ex Finance minister

South Africa

Mr Manuel, 55, is well-respected in global financial circles, having served as finance minister of South Africa from 1996 to 2009. Born in Cape Town under apartheid, he was imprisoned repeatedly by the South African government for political activities in the late 1980s. He has yet to announce his intention to run.

Tharman Shanmugaratnam

Tharman Shanmugaratnam

Finance minister/deputy prime minister

Singapore

The 54-year-old has been the country's finance minister since 2007 and on Wednesday added the new job of deputy prime minister. With degrees from the London School of Economics and Harvard. He recently became the first Asian to hold the post of chairman of the IMF's policy advisory committee.

Montek Singh Ahluwalia

Montek Singh Ahluwalia

Economic adviser to India's PM

India

Mr Ahluwalia, 67, is an influential economic adviser to Indian Prime Minister Manmohan Singh and has been a key figure in the country's economic reforms from the mid-1980s onwards. He supports open markets and has pushed the government to end fuel price controls and remove barriers to foreign business. His age may count against him.

Peer Steinbrueck

Peer Steinbrueck

Former German finance minister

Germany

Mr Steinbrueck, 62, is a long-shot to become IMF chief, in part because he alienated allies of Germany with his fiery rhetoric while serving as finance minister in conservative Chancellor Angela Merkel's "grand coalition" from 2005 to 2009. He also alienated the United States by openly blaming it for the global financial crisis.

Axel Weber

Axel Weber

Former head of Bundesbank

Germany

Mr Weber, 54, stunned Europe by announcing in February that he would be stepping down early from his post as head of the German central bank, the Bundesbank. Like Mr Steinbrueck, Mr Weber has a reputation as a loose cannon. Both Germans' chances may have been sunk by their government's support for Ms Lagarde.

Gordon Brown

Gordon Brown

Former UK Prime Minister

British

The 60-year old former UK prime minister and finance minister has long been seen as a candidate for the IMF job or another big international financial post. But his successor David Cameron - whose support he would need - has dismissed him as a "deficit denier", adding that it was time to look beyond Europe.

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No individual has yet said they are interested in the job.

Ms Lagarde herself has not expressed an interest, but has backed the single candidate idea, saying that "any candidacy, whichever it is, must come from Europeans jointly, all together".

Consensus decision

The IMF was formed in 1944 and is a crucial part of the world financial system, along with the World Bank.

It represents the interests of its 187 member countries and has played a central role in the eurozone crisis, lending billions of dollars to help bail-out Greece, Ireland and Portugal.

For this reason many senior politicians in Europe have said they believe the next head of the IMF should hold a European passport.

Interviewed by the BBC's economics editor, Stephanie Flanders, Mr Lipsky, who was Mr Strauss-Kahn's deputy until stepping up as interim head, would not be drawn on the battle that is emerging between central European and emerging economies over who should get the top job.

"This is an institution that works best in a collaborative, co-operative way. Most decisions are taken by consensus at the level of the executive board.

"So I'd expect, in the end, there will be general agreement around a talented, effective, new managing director."

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