U.K. Chancellor of the Exchequer Sajid Javid is backing George Osborne to become head of the International Monetary Fund (IMF) later this year, the Times of London reported.
“George would make an excellent, absolutely superb head of the IMF,’’ Javid told the Times in an interview published on Saturday. “As you know, these processes are never straightforward. But there’s still some time to play out.’’
Osborne was Chancellor of the Exchequer under the government of Prime Minister David Cameron from 2010 to 2016, and as the editor of the Evening Standard newspaper, Osborne backed Boris Johnson to be prime minister. A Briton has never run the IMF and the new government may want to push a candidate as a way to maintain its standing on the world stage after Brexit, which is planned for October 31.
An unwritten transatlantic agreement has allowed Europe to select the managing director of the IMF and the U.S. to choose the president of the World Bank. European governments have already selected Kristalina Georgieva, a Bulgarian economist and chief executive of the World Bank, as their candidate to lead the IMF.
The U.K. objected to the way the EU vote was held, saying it didn’t have enough time to field a candidate, according to officials familiar with the matter earlier this month, and it said it would abstain from the process and may still field a candidate at a later date. Osborne’s imposition of fiscal austerity during his time in office may not sit well with emerging-market governments, which have long chafed at the IMF’s hardline budget approach.
Bank of England Governor Mark Carney earlier this month dodged the question of whether he would be interested in leading the IMF. When pressed about who should become the next BOE governor, Carney said “George Osborne,’’ later saying it was a “joke.’’ It was Osborne who appointed him as the first foreign-born U.K. central bank governor.
The IMF will stop accepting applications for the job on Sept. 6 and is seeking to complete the process by Oct. 4. The winner will succeed Christine Lagarde and confront a global economy at its weakest since the aftermath of the financial crisis and threatened by rising trade tensions. Lagarde is set to become the president of the European Central Bank on Nov. 1.
Georgieva was picked over Spanish Economy Minister Nadia Calvino, Portuguese Finance Minister Mario Centeno, former Dutch Finance Minister Jeroen Dijsselbloem and Bank of Finland Governor Olli Rehn. Carney wasn’t on their shortlist. Georgieva would be the first Eastern European managing director of the IMF, and she has worked consistently in emerging markets.
Earlier this year, President Trump successfully pushed for U.S. Treasury official David Malpass to run the World Bank.
The Times interview also outlined Javid’s ideas for tax changes he’s considering for his budget later this year. Describing himself as a “low-tax guy,” he said he’s considering various options for the U.K. real-estate tax known as stamp duty and that he wants to simplify the system.
Source: Bloomberg
