IMF board to debate Georgieva’s future, with some backing from Europe -sources By Reuters
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Andrea Shalal, David Lawder
WASHINGTON, (Reuters) – The International Monetary Fund executive board will debate Kristalina Georgieva’s fate as the head of the institution Friday. It was due to discuss her alleged involvement in a World Bank data-rigging scam. Some European countries are expected to support her, sources familiar with the matter stated.
Unsourced information from the World Bank claims that Georgieva in 2017 was World Bank Chief Executive and used undue pressure on staff members to alter data for “Doing Business” flagship report, which helped China improve its business climate ranking.
IMF’s Board of Directors is currently reviewing the claims. They conducted long-lasting interviews this week with Georgieva, as well as WilmerHale attorneys. The firm was hired by World Bank’s board in order to probe data irregularities associated the Doing Business report.
Georgieva denies all allegations. Georgieva’s lawyer claims the WilmerHale investigation violated World Bank staff guidelines and denied Georgieva an opportunity for her to respond. WilmerHale also disputes the allegation. On Friday, the IMF board will resume its deliberations.
SUPPORT FOR STATTING
The IMF’s biggest shareholder countries have yet to publicly declare their opinions on Georgieva’s decision whether Georgieva, who has been in the role for over two years, should remain as managing director.
A source in France’s finance ministry told Reuters that France will support Georgieva during the meeting.
A source from the European Finance Ministry stated that Georgieva was supported by a variety of European countries, even though no top officials have publicly said otherwise.
Georgieva was also given a support statement by African finance ministers.
European governments traditionally choose the IMF chief. The president of the World Bank is nominated by the U.S. Administration.
France had supported Georgieva in 2019, a Bulgarian economist, who served as an EU Commission senior officer, to end a deadlock regarding Christine Lagarde’s successor.
U.S. Treasury has with 16.5% of voting shares an effective veto power over important Fund decisions and has not made any public comments on the matter.
Alexandra LaManna, a Treasury spokesperson said that the U.S. Treasury “pressed for a thorough accounting of all facts” during the ongoing review. We have the primary responsibility to protect integrity and security of financial institutions around the world.
CLOUDS FOR ANNUAL MEETINGS
As the Fund gets ready for the IMF/World Bank annual meetings next week in Washington, deliberations by the IMF board are taking place. The issue that will dominate the meeting is expected to be a major topic of discussion, whether the board supports Georgieva or asks for her to leave.
Former and current staff members from each institution and the outside claim that, regardless of who was responsible for altering data, it has put a dent in their research reputations. This raises questions as to whether the work they produce is susceptible to shareholder influence.
Anne Krueger is a former World Bank chief economist, and IMF’s first deputy managing direct, adding her voice to Thursday’s debate. She argued in a blog posting that Georgieva should resign to restore credibility to the Fund.
Krueger said that Georgieva, and her team would likely be forced to modify rankings and other country’s data if she is allowed to continue in her current position. And even if they do not resist, they will produce suspect reports. “The entire institution will lose its value.”
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