Argentina’s best ally in the IMF is against the ropes: today they will discuss his possible resignation and Europe appears divided over his continuity

Determining the future of the IMF managing director

Europe appears divided over the continuity of the Managing Director of the International Monetary Fund, Kristalina Georgieva, whose future will begin to be determined today. Argentina will be very attentive to this debate, a few hours before the start of the organization’s annual assembly.

The speed of definition will depend mainly on two issues: the position of the US Treasury Department, led by Janet Yellen, and the possibility of Europe uniting positions around a possible alternative, since it has traditionally been responsible for leading the multilateral body.

“The issue is not so much about Georgieva’s future as it is about the future of the IMF if she continues not to consider her innocent. It has become more complicated and I think he has lost credibility with the staff; it will cost a lot to deal with,” A former Argentine representative for the fund told Infobae.

In this regard, the “Financial Times” indicated that “France plans to lend its support to Kristalina Georgieva when the IMF’s 24 board members meet on Friday to assess whether they should retain the fund’s managing director after allegations questioned the ethics of her previous work at the World Bank.”

However, Germany and Great Britain remain suspicious and the United States appears closer to forcing them out.

In this regard, the “Financial Times” indicated that the matter is not clear “If Paris’ support will help persuade other European countries to resolve the looming debate over the multilateral lender for the past three weeks that threatens to overshadow the annual meeting of the International Monetary Fund and the World Bank in Washington, D.C., which begins on Monday.”

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“Many EU countries and the UK were waiting for any indication from the Biden government about whether Georgieva had lost US support, according to people familiar with board discussions.”

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

Argentine President Alberto Fernandez poses with the Managing Director of the International Monetary Fund, Kristalina Georgieva
Argentine President Alberto Fernandez poses with the Managing Director of the International Monetary Fund, Kristalina Georgieva

“On matters relating to the Director General, they are trying to reach consensus as soon as possible. I am sure they want to postpone this until next week, but it looks very difficult.” To the Argentine government’s best ally in the International Monetary Fund.

On the other hand, Georgieva said in a statement on Thursday that she hopes for a “quick resolution of the issue in order to preserve the strengths of the IMF and the World Bank as strong multilateral institutions that fulfill their important tasks in these times of unprecedented crisis.”

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

Georgieva has denied any wrongdoing and dismissed the allegations, a line of defense she repeated before the board of directors on Wednesday. The accusation appeared in a report commissioned by the World Bank board of law firm Wilmerhill, which met with the International Monetary Fund’s board on Monday.

The bank’s board made the decision to publish the report on September 16, hours after the bank announced that it would stop publishing the Doing Business report due to ethical concerns about the behavior of the previous board.

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Besides Paris, “The Hungarian Economy Minister also spoke in favor of Georgieva this month, noting that the attacks against her have a political undertone that has no place in international financial institutions.”

On the other hand, at the end of last week, “a public relations agency appointed by Georgieva issued a statement of support from the finance ministers of 16 African countries.” When asked about the matter late last week, Kristina WogatskyA spokeswoman for the German Finance Ministry said:Consultations are currently underway at the International Monetary Fund. As you know, Georgieva is the current head of the International Monetary Fund and in this position she has the opportunity to make a statement. Germany wouldn’t expect that.”

The Argentine government had no official opinion Minister Martin Guzman defended the progress made with Georgieva a few days ago.

The main issue looming in the capitals of the European Union is “the position of Joe Biden and the US Treasury Secretary, Janet Yellen, Because Washington has the most 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 standing on the side,” said a source familiar with the discussions.

Hours earlier, a Treasury 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 has pushed for a “full and fair account of all the facts.”

A source close to the fund said it appeared the IMF’s goal was to resolve the issue at the board level before the fund’s annual meetings next week. However, a former IMF official said that could be difficult to achieve.

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In this regard, Georgieva’s departure would generate political headaches in Europe, which has long held this position, while Washington traditionally appoints the head of the World Bank. And he warned that if he stayed, the credibility of the fund would be “significantly diminished”. Ann Kruger, the former first deputy managing director of the International Monetary Fund, who was very difficult for Argentina after the exit from convertibility.

Meanwhile, the minister said Martin Guzman He prepares his bags for departure on Sunday to Washington, where he plans to meet Georgieva and the staff driving them Julie Cusack And Louis Cupedo, to negotiate a new agreement that would allow the state to refinance its debt of 45 billion US dollars for 10 years, a task that will not be easy either because of the demands involved, or because of its relative weakness, adding to the uncertain future of the single-digit fund. With or without Georgieva, the IMF will require the government to have a consistent and actionable economic plan, as articulated by the Treasury and US staff, which poses an additional challenge given the wide differences that exist within the coalition. November elections.

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Freddie Dawson

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