EU's IMF Race Down to Two in Unprecedented Vote

A tough-talking former Dutch finance minister faced the Bulgarian number two of the World Bank Friday in an unprecedented run-off vote for the EU candidate to lead the IMF, aimed at resolving sharp divisions within the bloc.

After three candidates fell by the wayside during the day, Jeroen Dijsselbloem of the Netherlands and Bulgaria's Kristalina Georgieva were the last hopefuls in a second round of voting by EU ministers.

The post of managing director of the International Monetary Fund -- which by convention but not rule goes to a European -- became available after Christine Lagarde was tapped to lead the European Central Bank.

French Finance Minister Bruno Le Maire, who is leading the effort to choose the EU's pick, opted to hold the vote among finance ministers after they failed to find a consensus on a single candidate earlier this week.

There had been a shortlist of half a dozen candidates, but Portuguese Finance Minister Mario Centeno dropped out and was followed by Spain's Economy Minister Nadia Calvino.

The Spanish government said it had withdrawn her candidacy in the name of European unity, and added that Madrid supported a "consensus" around a single candidate.

Bank of Finland chief Olli Rehn then also withdrew, saying he wanted "a broad-based consensus for the European candidate."

Britain declined a last-minute invitation to field a candidate, the French finance ministry said, amid speculation that Canadian-born Bank of England governor Mark Carney could be interested.

A second round of voting, being conducted by email, was now underway, the French finance ministry said.

- Bulgarian favorite? -

The lack of consensus on a candidate reflects deep EU divisions that pit northern Europe against the south.

Nations in southern Europe have long memories of the tough austerity measures imposed as part of the IMF-backed debt bailouts, which they say choked off economic growth they badly needed to recover.

Southern countries chafe at the prospect of Dijsselbloem because of his tough stance against nations like Greece when he headed the group of EU finance ministers.

"I can't spend all my money on drinks and women and then ask for help," he said in one particularly notorious comment in 2017.

A source close to the discussions, asking not to be named, said the candidate currently garnering the most support is Georgieva, who has served as chief executive of the World Bank, the number 2 post, since 2017.

An economist by training, she was previously Bulgaria's EU commissioner from 2010. In 2016, she was a leading candidate to become U.N. secretary general before losing out to former Portuguese premier Antonio Guterres.

But Georgieva turns 66 later this month, which would infringe a rule that the IMF's managing director must be under 65 when appointed.

Other fund members would have to make an exception for her, "which is not a given", according to one source close to the discussions.

- 'Not official policy' -

The vote is being held under the EU's qualified majority voting rules, meaning the winner needs the backing of at least 16 of the bloc's 27 member states, representing at least 65 percent of its population.

The IMF plans to select its new leader by October 4. Since its creation in 1944, the fund has always been led by a European, while by convention a U.S. citizen is in charge of the World Bank.

The convention has come under strain in recent years, with developing economies demanding a greater say at the Washington-based institutions.

US Treasury Secretary Steven Mnuchin emphasized at a meeting of G7 ministers last month that naming a European to head the IMF was a convention, "not an official policy". 

Possible non-European candidates could include the general manager of the Bank of International Settlements and former Bank of Mexico governor Agustin Carstens, and Lesetja Kganyago, the governor of the central bank of South Africa.