Audio By Carbonatix
The European Union has nominated Kristalina Georgieva to lead the International Monetary Fund (IMF), ending weeks of impasse among 28 countries.
Georgieva, from Bulgaria, is currently serving as chief executive of the World Bank.
Last month, Christine Lagarde resigned as the managing director of IMF to take on a new role as the next head of the European Central Bank (ECB). European officials found themselves in a standoff and decided to take a vote in order to nominate the most-favored candidate.
The candidates in the running also included:
- Jeroen Dijsselbloem, former Dutch finance minister and president of the Eurogroup (which brings together the 19-euro zone finance ministers).
- Nadia Calvino, the Spanish finance minister.
- Olli Rehn, central bank governor of Finland and former European commissioner for the euro.
IMF member countries can make nominations until September 6. After that, the IMF board will interview the nominated candidates and aim to complete the process of selecting IMF’s new head by October 4.The IMF has always been led by a European, since the institution’s creation. In contrast, the United States get to appoint the president of the World Bank.
Back in 2011, when Christine Lagarde was appointed to lead the IMF, there were two main topics to deal with: rebuilding the reputation of the IMF after a scandal involving its previous chief and supporting the euro zone during the sovereign debt crisis. Now, the global landscape is arguably more complex than eight years ago.
The U.S. and China have been on a trade dispute for about two years. Their trade war is seen as the biggest stumbling block to global growth. At the same time, there is a strong focus on monetary policy – how central banks decide to support the various economies and whether their tools are still effective after nearly a decade since the sovereign debt crisis.
“Whoever is going to head the IMF needs to be ready to go to war. The war is trade war, currency war – those are emerging risks that need to be addressed,” Mouhammed Choukeir, chief Investment officer at Kleinwort Hambros told CNBC earlier this week.
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