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The next Lagarde? Europe searches for one of its own to take the IMF job

Key Points
  • Since the IMF's formation back in 1945, the managing director has always been from Europe.
  • If the appointment of Lagarde goes ahead, she will take over the ECB on November 1.
  • This gives the IMF a couple of months to nominate its next chief.
IMF managing Director Christine Lagarde arrives during Eurogroup meeting at the EU headquarters in Luxembourg on June 13, 2019.
JOHN THYS | AFP | Getty Images

The International Monetary Fund (IMF) will soon start the process of choosing a new managing director, with Christine Lagarde set to leave the organization in a few months' time.

EU ministers have made it clear they want to see someone from their continent take the job — which will be a five-year term — and continue the tradition of having a European at the helm of the Washington-based institution. Since the IMF's formation back in 1945, the managing director has always been from Europe.

"What we want in France is first to have a European Union candidate that can succeed Lagarde as the head of the IMF; secondly, we want to be able to take a decision quickly; thirdly, I want it to be a unique candidate, presented by the EU, without useless rivalries," Bruno Le Maire, the French finance minister, said last week. His Spanish counterpart, Nadia Calvino, also said it was a "priority" for it to be European.

Lagarde decided to suspend her role as managing director, shortly after the 28 heads of state decided she should replace Mario Draghi as the ECB chief. Before officially taking on her new position, Lagarde has to answer questions from European lawmakers in the coming months. Therefore, official discussions on who should replace her at the IMF are unlikely to start until she hands in her official resignation.

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However, there are already a couple of names floating around, which include:

  • Mark Carney, the current governor of the Bank of England — a Canadian citizen who also has Irish and English passports.
  • Kristalina Georgieva, from Bulgaria, who is currently serving as chief executive of the World Bank.
  • Jeroen Dijsselbloem, former Dutch finance minister and president of the Eurogroup (which brings together the 19-euro zone finance ministers).
  • Mario Centeno, currently president of the Eurogroup and Portuguese finance minister.
  • Nadia Calvino, the Spanish finance minister.
  • Mario Draghi, the outgoing president of the European Central Bank (ECB) and an Italian national.
  • Benoit Coeure, currently a member of the ECB executive board, but whose mandate ends in December.
  • Wolfgang Schaeuble, former finance minister of Germany and currently speaker of the German parliament.
  • Euclid Tsakalotos, former Greek finance minister who implemented the country's third bailout program.

If the appointment of Lagarde goes ahead, she will take over the ECB on November 1. This gives the IMF a couple of months to nominate its next chief.

How does this process work?

The IMF's Executive Board is responsible for selecting the managing director. This board is composed of 24 permanent individuals, who are elected by individual member countries, or by groups of countries. However, since 2011, IMF governors — representatives from the different member countries of the IMF, which are usually finance ministers or central bank governors — can also submit names of potential candidates.

Once the Executive Board draws up a shortlist of three candidates, these people are interviewed and then the 24 individuals consider the pros and cons of each nominee — until they agree on one name by a majority of the votes.

According to the IMF, the managing director needs to have a strong record in economic policymaking at "senior levels." They also need managerial, communication and diplomatic skills and the person should be from an IMF member country.

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