Georgieva’s future as IMF head still unclear after marathon board meeting

World Bank Managing Director Kristalina Georgieva speaks during the China Development Forum (CDF) 2018 annual session at Diaoyutai State Guesthouse in Beijing, China on March 25, 2018. REUTERS / Jason Lee / File Photo

WASHINGTON, Oct. 8 (Reuters) – The board of directors of the International Monetary Fund on Friday ended a five-hour meeting on the future of Managing Director Kristalina Georgieva without a decision, saying it would ask for more information on allegations that she pressured World Bank staff to change the data. for the benefit of China in its previous role.

The IMF said the board had made “significant progress” in its review of the World Bank’s data-rigging scandal, but agreed to seek “more details with a view to concluding its review very soon. question”.

It was not immediately clear whether the board would meet again before the start of the high-level IMF and World Bank meetings next week, where Georgieva is expected to play a leading role in presenting the latest economic forecasts from the global lender.

Some European governments backed the Bulgarian economist to stay at the helm of the IMF during Friday’s marathon meeting, according to people familiar with the matter.

Other officials have asked for more time to examine discrepancies between Georgieva’s accounts and the WilmerHale law firm hired by the World Bank to investigate data irregularities in its flagship Doing Business reports.

Georgieva said she answered all of the board’s questions and remains available to the board as it concludes its review.

Georgieva has strongly denied the allegations, which date back to his time as Managing Director of the World Bank in 2017. His lawyer claims WilmerHale’s investigation partly violated World Bank personnel rules by denying him the opportunity to respond to the charges , a claim WilmerHale disputes.

China has not commented on the report’s findings.

A source from the French finance ministry told Reuters that France plans to express support for Georgieva during the board meeting. Britain, Germany and Italy are also expected to back Georgieva, another source briefed on the matter said. She also received a statement of support from African finance ministers.

Officials from the French, British and German embassies in Washington did not immediately comment. The Italian Embassy did not immediately respond to the request for comment.

But hopes for a quick consensus on his future at the IMF have vanished amid uncertainty over the US position.

The US Treasury, which controls 16.5% of IMF shares, declined to comment after Friday’s meeting.

Treasury spokeswoman Alexandra LaManna said earlier this week that the department had “pushed for thorough and fair accounting of all facts” as part of the ongoing review. “Our primary responsibility is to maintain the integrity of international financial institutions,” she said.

MARATHON MEETINGS

Friday’s marathon board meeting, held behind closed doors, followed lengthy meetings with Georgieva and WilmerHale lawyers earlier in the week. Read more .

WilmerHale’s survey report prepared for the Board of Directors of the World Bank alleged that when Georgieva was CEO of the World Bank in 2017, she put “undue pressure” on bank staff to change data from the flagship “Doing Business” report to strengthen the ranking of the business climate in China .

Europe’s support is important since the head of the IMF has traditionally been chosen by European governments, with the US administration appointing the president of the World Bank.

In 2019, France supported Georgieva, a former senior European Commission official, as a compromise candidate to break the deadlock over the successor of Christine Lagarde, now president of the European Central Bank. She is the first person from a developing economy to lead the institution.

ANNUAL MEETING CLOUDS

The issue is expected to dominate the annual meetings of the World Bank and the IMF next week.

Current and former staff at both institutions said that regardless of who is to blame for the changed data, the scandal has tarnished the reputation of their researchers, raising critical questions about whether this work is subject to country influence. members.

Anne Krueger, former Chief Economist of the World Bank and first Deputy Managing Director of the IMF, argued in a blog post Thursday that Georgieva must resign to restore the credibility of the Fund.

“If Georgieva stayed in her post, she and her staff would surely come under pressure to change data and rankings for other countries,” Krueger wrote. “And even if they resist, the reports they produce will be suspect. The whole work of the institution will be devalued.”

Reporting by David Lawder and Andrea Shalal in Washington; Additional reporting by Leigh Thomas in Paris and Bart Meijer in Amsterdam; Editing by Marguerita Choy, Cynthia Osterman and Lincoln Feast.

Our standards: Thomson Reuters Trust Principles.

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