IMF board to debate Georgieva’s future, with some backing from Europe -sources

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Washington (Businesshala): It was expected that people familiar with the matter said.

FILE PHOTO: World Bank chief executive Kristalina Georgieva speaks at the annual session of the China Development Forum (CDF) 2018 at the Diaoyutai State Guesthouse in Beijing, China March 25, 2018. Businesshala/Jason Lee/File photo

An outside World Bank investigation report alleges that when Georgieva was World Bank chief executive in 2017, she manipulated bank employees to make data changes in the major “Doing Business” report to boost China’s business climate rankings. applied “unreasonable pressure”.

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The IMF board is reviewing the claims and this week conducted round-the-clock interviews of both Georgieva and attorneys from WilmerHale, a firm appointed by the World Bank’s board to investigate data irregularities related to the Doing Business report.

Georgieva has strongly denied the allegations and her lawyer claims that the Wilmerhalle investigation violated World Bank staff rules and did not give them an opportunity to respond to the allegations, a claim that Wilmerhalle disputes. The IMF board is expected to discuss the matter again on Friday afternoon.

stating support

So far, the IMF’s largest shareholder governments have not publicly stated their position on whether Georgieva should continue as managing director of the IMF, a job she has held for two years.

A source in France’s finance ministry told Businesshala on Friday that France plans to extend its support to Georgieva at a board meeting.

Another European finance ministry source said Georgieva had the support of several European governments, as no senior official had publicly stated otherwise.

Georgieva has also received a statement of support from African finance ministers.

The IMF chief is traditionally elected by European governments, with the US administration nominating the president of the World Bank.

In 2019 France backed Bulgarian economist Georgieva, who has held senior positions at the European Commission, as a compromise candidate to break the impasse over the successor to European Central Bank President Christine Lagarde.

The US Treasury, which has an effective veto on major fund decisions with a 16.5% voting share, has avoided a public decision on the matter.

Treasury spokeswoman Alexandra Lamanna said the US Treasury has “emphasized the need for a thorough and unbiased audit of all facts” in the ongoing review. “Our primary responsibility is to maintain the integrity of international financial institutions.”

annual meeting cloud

The IMF board deliberations come as the fund prepares its biggest policy program for the annual meetings of the IMF and World Bank in Washington next week. Whether the board voices its support for Georgieva, asks her to leave, or continues deliberations, the issue is expected to dominate the meetings.

Current and former employees from both institutions and outside say that regardless of who is to blame for the altered data, the scandal has dented their research reputation, raising significant questions over whether that work is subject to shareholder influence.

Anne Krueger, the former chief economist of the World Bank and the IMF’s first deputy managing director, added her voice in a blog post on Thursday arguing that Georgieva needed to step down to restore the fund’s credibility.

“Should Georgieva remain in her position, she and her staff will certainly be pressured to change the data and rankings of other countries,” Krueger wrote. “And even if they protest, the reports they will present will be questionable. The work of the entire institute will be devalued.”

Reporting by David Lauder and Andrea Schallal in Washington; Additional reporting by Leigh Thomas in Paris and Bart Meijer in Amsterdam; Editing by Marguerita Choy

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