Germans struggle in battle for IMF post


European disarray over who should become the head of the International Monetary Fund (IMF) grew yesterday as Germany struggled to rally support behind a new German candidate after the withdrawal of Berlin's first choice for the post.

Mr Gerhard Schroder, German Chancellor, put forward Mr Horst Kohler, president of the London-based European Bank for Reconstruction and Development, after Mr Caio Koch-Weser, a top finance ministry official, backed down following his rejection by the US and failure to win majority support within the IMF.

The finance ministry insisted Mr Kohler stood a "good chance" of being adopted as the European Union's candidate to succeed Frenchman Mr Michel Camdessus, who stepped down as IMF managing director last month.

But Mr Lamberto Dini, Italy's foreign minister, indicated Berlin was proposing the wrong people for the job. "You cannot think about managing an institution like this if you don't have a broad consensus behind you," he said.

Mr Dini said the IMF job needed to be filled by "a treasury minister, an ex-treasury minister or a former prime minister" and could not be filled by a "technician or a high functionary".

There has been strong speculation in recent days that Italy could propose Treasury Minister Mr Giuliano Amato, a figure viewed favourably in Washington for the post.

France, Germany's principal ally in the euro zone, avoided any formal endorsement of Mr Kohler. "We want this job to continue in European hands but it cannot be seen as a European sinecure by other members of the IMF," a senior French official said. "This means we must find someone who has all the right qualities to convince other IMF members the job will continue to be well done."

However, Germany's EU allies were acutely aware of the need to help Mr Schroder avoid further embarrassment over the IMF affair.