IMF’s Top Job Shouldn't Be Another Stitch-Up

(Bloomberg Opinion) -- After a messy selection process, the European Union's finance ministers have picked Kristalina Georgieva as their candidate to lead the International Monetary Fund. The Bulgarian economist, currently chief executive of the World Bank, has suitable credentials but it would be wrong of the IMF board to rubber stamp her nomination just because a European has always held the post. The choice should be open. Other people, especially from emerging markets, should be encouraged to apply too.

The EU hasn't exactly been a model of unity in deciding who should succeed Christine Lagarde when she moves from the IMF to head the European Central Bank in the autumn. After weeks of confusion, Bruno Le Maire, France's finance minister, opted to put the choice to a vote instead of trying to establish a consensus view. On Friday, Georgieva narrowly defeated Jeroen Dijsselbloem, the former Dutch finance minister. Other candidates included Olli Rehn, governor of Finland's central bank, and Nadia Calvino, Spain's economy minister.

The need to hold a formal vote is yet another example of Europe's leaders struggling to agree on who should hold key posts. The choice of Ursula von der Leyen as president of the European Commission was even more tortuous.

In fairness, the EU's finance ministers weren't helped in their deliberations over the IMF candidate by the absence of a clear front-runner. Mario Draghi, the departing ECB president, would have been the best choice given his political and economic skills, but he ruled himself out. This left a list with no outstanding candidate. That France backed Georgieva, while Germany preferred Dijsselboem, will be seen as another victory for President Emmanuel Macron after the dovish Lagarde's ascension to the ECB post.

There are, of course, plenty of reasons for the IMF board to choose Georgieva when it votes in October. The Bulgarian economist has worked for decades in transnational organizations, including the World Bank and the European Commission, and is known for her diplomatic skills in dealing with demanding international stakeholders – including Washington.

She would be the first eastern European managing director of the IMF, and has worked consistently in emerging markets, which would at least represent some kind of break from the past: The role has been held continuously by a western European as part of an agreement whereby the U.S. in turn always claims the presidency of the World Bank. Her age (she turns 66 next week) is just above the IMF's limit, but such rules can always be changed.

For all Georgieva's assets, though, it would still be wise for the board to consider other possibilities too. Tharman Shanmugaratnam, a senior minister in Singapore and chair of its Monetary Authority, and Mark Carney, the Canadian-born governor of the Bank of England, would be two other strong candidates. That they weren't born in Europe shouldn't be a reason to discount them were they to put themselves forward.

The world economy is changing as Europe's share of global income continues to fall. At a fraught moment for international politics and economics, the IMF needs the best possible head regardless of where she or he comes from. A selection based truly on merit is far better than an anachronistic American-European stitch-up.

To contact the editor responsible for this story: James Boxell at jboxell@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Ferdinando Giugliano writes columns on European economics for Bloomberg Opinion. He is also an economics columnist for La Repubblica and was a member of the editorial board of the Financial Times.