Agence France Presse / Virginie Montet
WASHINGTON, March 23 (AFP) - The IMF executive board Thursday named Horst Koehler as the new managing director of the organization, handing him the reins of an institution struggling to redefine its own mission.
The appointment of the 57-year-old German, currently president of the London-based European Bank for Reconstruction and Development, brought to a close what had become a diplomatically difficult selection process.
Officials of the European Union were irked by Washington's rejection of the initial EU candidate, German finance official Caio Koch-Weser.
And several African countries took exception to what has become a tradition of giving the helm of the International Monetary Fund to a European.
But Koehler, who became the EU nominee after Koch-Weser withdrew, won the backing of the United States, Russia and Japan and was unanimously approved Thursday by the IMF's 24 executive committee directors, who represent its 182 member countries.
A longtime civil servant whose tenure in top positions at the German Finance Ministry made him a close advisor to chancellor Helmut Kohl in the early 1990s, Koehler is to fill the vacancy left by former IMF chief Michel Camdessus of France, who retired February 14.
The discord on who would best replace Camdessus brought into focus a mounting debate on the IMF's proper role and on how it and the World Bank should share their respective tasks.
On a visit to Washington last week in which Koehler met US Treasury Secretary Lawrence Summers, he declared himself open to dialogue on reforming the IMF and said he believes it important to include developing countries in the discussion.
But Koehler declined to express support for a US congressional commission's proposal that the IMF cancel debts owed to it by the world's poorest countries.
"I have a bit of a concern that this discussion of debt relief and debt reduction is not strongly enough combined with reform and macroeconomic stability," he said.
The White House wants the IMF to focus more on short-term crisis prevention and reduce areas of overlap with World Bank aid efforts. Conservatives in the US Congress want the IMF to cut back on long-term loans to insolvent -- that is, poor -- countries.
A consensus appears to be forming around reducing the types of loans made by the IMF, but remarks by Koehler have suggested he is aligned with other top IMF officials in believing the institution should continue to engage with poor countries to push for reforms and reduce poverty.
Among other hot issues to be faced by Koehler will the question of IMF policy toward Russia, which holds presidential elections Sunday.
Loans to Russia were suspended in September on grounds that its central bank was not open enough in its handling of foreign reserves and its government had failed to implement various economic reforms favored by the IMF.
Koehler will face his earliest major challenge in mid-April, at the IMF/World Bank spring meetings in Washington, where "anti-globalization" activists hope to repeat the success of their protests in Seattle, Washington, against the World Trade Organization.
The new IMF chief has said he favors opening the multilateral lending institution to dialogue with its critics, but on condition that such dialogue not obstruct the strength or mission of what he called "society's democratic institutions" and their "elected officials."
Before taking the helm of the EBRD, Koehler was president of Germany's federation of savings banks from 1992-1998.
Starting work at the German Finance Ministry in the 1970s, Koehler rose up through the hierarchy to head several key departments before serving as the ministry's secretary of state under former finance minister Theo Waigel, from 1990-1992.
In that role, Koehler was one of Kohl's closest advisors in preparations for international economic summits and other international gatherings.:
