IMF Job Up for Grabs

European countries are searching for a replacement for current IMF managing director Rodrigo Rato after the Spaniard's surprise announcement at the end of last month that he intended to step down in October.

By tradition Europe chooses the head of the IMF and the United States picks the president of the World Bank, the IMF's sister institution.

"I do expect a broad exchange of views among ministers concerning the name of the man to be at the helm of the IMF," one diplomat said.

Although there had already been "quite a few informal contacts and these contacts will continue," the diplomat added that "I do not expect to have a name coming out of the meeting."

In the run-up to the regular meeting of EU finance ministers on Tuesday in Brussels, several French, Italian and Polish names had been circulating as possible successors to Rato.

Sarkozy has proposed senior Socialist and former French finance minister Dominique Strauss-Kahn, but the plan is likely to generate more heated debate between the France's European partners.

In an interview published on Sunday, Sarkozy announced that he had already recommended the respected multilingual diplomat to US President George W. Bush and the leaders of Spain, Italy and Britain. By doing so, some diplomats say, the French president had seized the initiative and got his man's name on the card before other rival European contenders emerged.

Multilingual socialist is Sarko's main man

Strauss-Kahn is a strong advocate of the concept of a mixed economy, coupling free-market reform with the defense of a state role in industry, ideas close to those of the president himself. Critics suggest that while Strauss-Kahn holds some similar economic principles as Sarkozy, the president’s plan has more to do with depriving the opposition French socialists of one of their most popular and effective figures.

While holding off on endorsing the French candidate, German Finance Ministry spokesperson Torsten Albig said at the weekend that the Germans held Strauss-Kahn in high regard as a "good European candidate" But added the German cabinet would discuss the proposal before Berlin gave its formal support.

Finance Minister Peer Steinbrück's deputy Thomas Mirow, added in a separate statement at an insurance industry seminar in Berlin, that Strauss-Kahn's competence was not in doubt, but there were other candidates.

"The credentials of Strauss-Kahn cannot be disputed," Mirow's statement said. "As regards the political process, we have just started."

French in strong institutional roles

President Sarkozy was to attend a meeting of euro zone finance ministers in Brussels on Monday evening to defend his plans to introduce tax cuts, which will weigh on the French deficit, and was expected to use his presence to promote Strauss-Kahn's candidacy.

France has had its fair share of IMF heads as Frenchmen have led the institution for more than 30 of its 61 years of existence, and also have Jean-Claude Trichet in charge of the European Central Bank, Pascal Lamy at the World Trade Organization and Jean Lemierre at the European Bank for Reconstruction and Development.

Meanwhile speculation continues as to who the other viable candidates would be for the IMF position.

Other candidates mentioned in passing

The Wall Street Journal newspaper last Thursday named Italian Economy Minister Tommaso Padoa-Schioppa and the governor of the Bank of Italy, Mario Draghi, as possible candidates.

However, Draghi said Monday that he is not interested in succeeding Rodrigo Rato as the head of the International Monetary Fund. "I am not interested in the IMF," he said on the sidelines of the release of a report by the Italian stock exchange authority CONSOB. "I said so right away (after Rato announced his plan to leave), and I say it again," Draghi added.

The Financial Times newspaper in Britain cited two Poles, former central bank president Leszek Balcerowicz and former Prime Minister Marek Belka, as potential contenders.

Developing countries for years have protested in vain against the tradition of Europeans running the IMF and Americans leading the World Bank and have called for an open competition for both posts.

Rato's surprise exit from the IMF comes at a sensitive moment as the institution struggles to find its bearings amid an internal reform launched by Rato himself and as more and more countries opt not to borrow from it.

"I don't think Europe can simply say 'that position is ours and we are not prepared to discuss it with anyone else'," British Finance Minister Alistair Darling said in remarks released by his office on Monday.

"There is a view that it is our (Europe's) turn. Just because it has always been so in the past does not mean it will always be so in the future," Darling told the Guardian newspaper. "All these processes need to be opened up."

The European Commission, on the other hand, would prefer to see the post go to a EU national.

"We hope that European Union countries will find a suitable candidate very soon to continue the very important reform process underway," European Commission spokeswoman Amelia Torres said.

However, she ruled out a non-European to head the IMF.

"We would like the European countries to agree on a European candidate," she said.