IMF Chief: We have upgraded every country but the UK
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Tensions between the USA and EU over the future of the International Monetary Fund (IMF) Managing Director, Kristalina Georgieva, will loom over a week of crucial meetings. Ms Georgieva, accused of data-rigging, has support from European nations, but the US wants her gone – and the divisions are deepening.
The IMF’s annual meetings could be largely overshadowed this week as the scandal surrounding Ms Georgieva deepens.
In September, she was accused of pressuring staff to change data to boost China’s “Doing Business” ranking when she was World Bank CEO in 2017.
Now, the 24 members of the IMF’s executive board are split into two camps, with the US and Japan on one side, and France, Germany, Italy, the UK, China and Russia on the other.
The US and Japan – the fund’s two biggest shareholders – want Ms Georgieva gone.
But France and other sympathetic nations want the Bulgarian economist to finish her term as IMF chief.
The IMF board met on Sunday with Ms Georgieva and the law firm laying the claims, with the IMF saying it had ought to “clarify details” in the review.
A statement from the IMF after the meeting said: “The board made further significant progress today in its assessment with a view to very soon concluding its consideration of the matter.”
On Monday, all 24 members of the IMF board will meet again to decide on Ms Georgieva’s fate.
A former division chief at the IMF told the FT the extent of the board’s disagreements over Georgieva’s fate had already undermined her ability to lead going forward.
The official said: “Such openly divided and at best modestly enthusiastic support for its managing director risks hobbling the institution’s effectiveness, both in terms of its policy advice and credibility of its analysis.
“Even if she weathers this storm, it will be difficult for Ms Georgieva to continue as an effective leader of the institution for much longer.”
And Anne Krueger, a former World Bank chief economist and deputy managing director of the IMF, said the affair left her “worried about the future in general”.
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She said: “I’m worried that if indeed this is somehow permitted to pass, we will have more pressure for more governments to change more numbers in more favourable directions.
“Not everybody . . .[will] give in but there are some staff or management who will, and the situation will get out of hand if it isn’t already.”
But backers of Ms Georgieva cite her support for poorer nations during the coronavirus pandemic and her realignment of the fund’s priorities to address issues such as climate change and gender equality.
She has highlighted the unequal global response to the pandemic and channelled IMF emergency funding to 100 of the world’s poorest countries.
She has also pushed through an allocation of $650bn of the IMF’s special drawing rights, a quasi-reserve asset that is the equivalent of newly minted money.
Jeffrey Sachs, director of the Center for Sustainable Development at Columbia University, wrote in the Financial Times that her removal “would be a dangerous and costly capitulation to anti-Beijing hysteria”.
Joseph Stiglitz, Nobel laureate and former chief economist at the World Bank, described efforts to remove her as a “coup”.
Six former World Bank officials, in a statement issued by a public relations agency retained by Ms Georgieva last month, defended her as a “person of the utmost integrity and commitment to development”.
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