In theory the next managing director of the International Monetary Fund (IMF) will be appointed on the basis of a transparent and open process. In practice the decision will be the result of fierce, behind-closed-doors, political horse-trading.
To get the job Paschal Donohoe, the Minister for Public Expenditure, would need the support of both Europe and the US before a vote is taken next autumn. But the race has still to take shape, so – while Donohoe is a credible candidate – his prospects of getting the job remain unclear with higher-profile EU finance ministers, commissioners and central bankers all possible candidates and the chance, too that the UK might put someone forward. The expected appointment of Nadia Calvino, the Spanish finance minister, to head the European Investment Bank removes one possible competitor.
Donohoe has not confirmed his interest, but has not ruled himself out either following a Bloomberg report that he had held initial meetings to discuss his candidacy. His position as head of the eurogroup of finance ministers would position him well for a run for the job.
Under a long-standing agreement a European gets the IMF managing director job and an American heads the World Bank. With the vital support of France, current IMF managing director Kristalina Georgieva got the job in 2019, after the former incumbent Christine Lagarde left to become ECB president. The IMF changed its age rules for the job to allow her to take it – she was 66 at the time. It is not clear if she will decide to seek a second term – there are some reports of tensions with the US over her handling of a World Bank business index in 2018, when, as that organisation’s managing director, it is alleged she bumped up China’s rankings.
While Europe would be expected to put forward the next candidate – or candidates – the support of the US is vital and has on at least one occasion led to a change of European name. Other countries around the table, particularly from the developing world, may decide to kick up about the traditional sharing out of the job and have previously proposed their own candidates. Russia and China will also want to have a say. However, if the big two players – and funders – of the IMF do agree, then that candidate would most likely be impossible to beat. In some previous occasions Europe – unable to agree – has put forward a couple of candidates, leaving the wider group to choose one.
The process will not start formally until next summer – in 2019 the IMF board kicked it off in late July and made the appointment in late September after a consensus was reached and the 24-person executive board, including representatives of IMF member countries, gave the green light. But the horse-trading will start earlier. EU finance ministers will seek to reach a consensus on a candidate, with the complication of trying to get the UK on board for a single “European” candidate. Last time they did not decide until August.
If needed the executive board then narrows the shortlist down to three and invites them to make presentations. Applicants are expected to have “a distinguished record” in economic policymaking, have a strong professional background including managerial and diplomatic skills and be able to provide strategic vision for the organisation. While in theory the executive board then selects the best candidate, in practice the outcome will most likely already have been decided.