European Council on Foreign Relations

Europeans united in misjudgement over the IMF

In the debate about the next head of the IMF, the EU is looking surprisingly united and decisive in putting forward one candidate only three days after Dominique Strauss Kahn resigned. This sounds like good news for the struggling EU foreign policy given the experience of frequent division and ineffectiveness.

The bad news is that this time it is unity for the wrong reason, i.e. to defend a 20th century privilege that the IMF chief should be a (West) European. (This is Richard Gowan's blog post on the issue.)

The message the EU sends to the world is: we find it difficult to get our act together on issues like climate change, the Arab uprising, migration, the Iraq war. But when it comes to defend our outdated privileges, united we stand.

This unity of today will backfire tomorrow. If the future global powers in Asia and South America replicate our behavior in the future, we will have a tough time.

Instead we should be using our role now to set, and live by, standards of global governance which will continue into the future.

One argument which is used to justify another grab for the IMF post is the need to have a European IMF head as a competent partner in solving the Euro Debt Crisis. Is that really a sound argument? Why was that argument not made during the Asian or Latin American debt crisis? To put it more plainly, this is the equivalent of insisting that the next head of the European Central Bank must be Greek, Irish or Portuguese.

A decision on the new IMF head will be taken in July. There is still time for the EU to contribute to a positive debate. The EU should put forward Christine Lagarde as its best qualified candidate, which she is. But it should state that the race is open and that the best qualified person should get the job. This would set the standard for this and for future international top appointments. And Europe needs the most qualified IMF head as a partner to solve the Eurocrisis. Nationality is now more secondary than ever before. 

Andre Wilkens is Director of the Mercator Centre Berlin and a founding member of ECFR

1 comments

Ryan 28th July 2012 at 05:07am

What I don’t get is how Germany ( the only productive, non   inedbted Eurozone member) is so foolish as to pump more money into this dying patient (Euro). The Euro will collapse within the next 2 -3 years. What do you think about the idea that the collapse of the Euro will provide a temporary boost to the dollar, thus giving our economy a window to improve ( re. asset prices) before any major inflation kicks in, thus mitigating our problems; or am I just being too much of an optimist?

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