World

US, EU Back German To Head IMF

March 13, 2000 / 10:21 AM EST / AP

After rejecting another German candidate, President Bill Clinton has pledged to support Horst Koehler's nomination to head the International Monetary Fund.

Clinton informed German Chancellor Gerhard Schroeder of his decision in a telephone call on Monday, according to White House press secretary Joe Lockhart.

The two leaders agreed that Koehler needs to come to Washington to meet with IMF board members, particularly representatives of developing countries, who favored other candidates for the job.

"The president and Chancellor Schroeder also agreed that Kohler should retain the talented management team at the IMF," Lockhart said.

Clinton's decision appeared to remove any obstacle to Koehler getting the job as to head the 182 nation organization, which has come to the rescue of troubled economies in recent years.

The United States blocked Germany's first-choice, Caio Koch-Weser, claiming that the deputy finance minister lacked the international standing needed to run the IMF.

Portugal had lobbied over the weekend for all 15 EU nations to line up behind Koehler at Monday's meeting of finance ministers in Brussels, Belgium.

Guterres said in Berlin that Koehler had received unanimous support.

Some of Germany's EU partners shared Washington's doubts about the qualifications of the first candidate, German Deputy Finance Minister Caio Koch-Weser, and only reluctantly threw their weight behind his bid.

They've been quicker to express support for Koehler, who currently runs the European Bank for Reconstruction and Development, which channels international aid to the former Soviet bloc.

Koehler has won plaudits during his 18 months running the London-based EBRD and is widely respected in Europe for his role in preparations for the creation of the euro, the currency shared by 11 EU nations.

A European customarily holds the managing director position at the IMF, while an American heads the World Bank. Washington says it still abides by that informal arrangement and will back a suitable European candidate.

Rejection of a second German nominee would have strained U.S. relations with Germany and other EU nations. A prolonged trans-Atlantic dispute would have also encouraged discontent in Asia, Latin America and Africa over the tradition that Europe and the United States hold the top jobs at the world's two leading finance institutions.

While Europe and the United States wrangled over the job in recent weeks, Japan put forward its own candidate, Eisuke Sakakibara, while a group of African nations have proposed Stanley Fischer, a U.S. citizen who has been acting IMF head since Frenchman Michel Camdessus stepped down in February.