Financial basis

IMF Board backs Georgieva to remain Managing Director


The IMF’s board chose to retain Kristalina Georgieva as the institution’s managing director and said it had “full confidence” in her ability to discharge her responsibilities, despite allegations that she reportedly pressured World Bank staff when she was its managing director to manipulate data for China’s benefit. benefit to.

The announcement follows marathon meetings of the IMF’s board, which struggled for days to reach agreement on Georgieva’s fate as sharp divisions emerged among its 24 directors.

France, Germany, Italy and the UK had lined up alongside China and Russia to champion his cause, while two of the fund’s biggest shareholders, the US and Japan , were more resistant and called for rigorous examination. But a consensus for Georgieva to serve his term emerged on Monday after further deliberations.

In a statement released on Monday evening, the IMF’s board said the evidence presented “did not conclusively demonstrate” that Georgieva played an “inappropriate” role in ranking China in a flagship report as he was at the World Bank.

“After examining all the evidence presented, the Executive Board reaffirms its full confidence in the leadership and the ability of the Executive Director to continue to perform her duties effectively. The Executive Board trusts the Managing Director’s commitment to upholding the highest standards of governance and integrity at the IMF.

Georgieva, who has repeatedly denied any wrongdoing, has been accused of artificially increasing China’s place in the 2018 edition of the World Bank’s widely watched annual Doing Business report during her tenure as head of the World Bank. institution.

His alleged efforts were detailed last month in a report commissioned by the World Bank and written by representatives from WilmerHale, a law firm. The IMF’s board has met eight times to discuss the matter, including two “in-depth” meetings with lawyers for WilmerHale and Georgieva.

The move comes at the start of the IMF’s annual meetings with the World Bank, which started this week amid a cloud of uncertainty over Georgieva’s continued existence. She attended several events on Monday and is expected to speak at several more over the next few days.

On Monday, Janet Yellen, the US Treasury Secretary, called Georgieva to tell her that while the World Bank report “raised legitimate issues and concerns,” the United States believed “in the absence of further direct evidence regarding the role of the managing director, there is no basis for a change in the direction of the IMF ”.

But Yellen appeared to warn Georgieva, telling the IMF chief that the Treasury would “monitor, closely monitor, assess any new fact or discovery” and the episode underscored the “need for shareholders to be vigilant in defending the ‘integrity of both bank and fund’.

President Joe Biden’s administration is also committed to pushing for changes to the IMF and the World Bank to prevent further cases of possible manipulation, which the IMF board has also said. reported that he would consider.

“The United States believes that proactive steps must be taken to strengthen the integrity and credibility of data at the IMF, and that the institution and its leaders must renew their commitment to maintain transparency and whistleblower protection regarding policies. , research and analysis, ”Treasury said.

The Biden administration’s decision not to insist on Georgieva’s ouster sparked an immediate backlash from Republicans in Congress.

“This decision is a terrible reflection of American leadership at the IMF,” said Patrick McHenry, the top Republican on the House financial services committee. “Republicans and Democrats in Congress have been alarmed by the investigation into Ms. Georgieva’s actions. It is shocking that the administration has ignored these bipartisan concerns and bowed to pressure from other countries who want to sweep this scandal under the rug.

In a statement released on Monday, Georgieva expressed “unwavering support for the independence and integrity” of the World Bank and the IMF.

“I am happy that after a full and impartial examination of the facts, the IMF’s executive board recognizes that the allegations were unfounded,” she said. “I would like to thank the Board of Directors for expressing their full confidence in my leadership. Trust and integrity are the cornerstones of the multinational organizations that I have faithfully served for over four decades.

“It was obviously a difficult episode for me personally,” she added.

European governments selected Georgieva, who is Bulgarian, to join the IMF in 2019 after a two-year stint at the helm of the World Bank – an institution she joined in 1993 as an environmental economist and which she left in 2010 to work for the European Commission, among other positions. , before joining the World Bank in 2017.

She replaced Christine Lagarde, who is now president of the European Central Bank, and her appointment forced the IMF to remove the age limit set in the fund’s statutes for the post.

Throughout her tenure, she has been lauded for her efforts to help emerging and developing economies overcome the coronavirus pandemic, leading the allocation of $ 650 billion in Special Drawing Rights, which is equivalent to newly minted silver earlier this year.


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