- The Washington Times - Friday, March 3, 2000

The International Monetary Fund failed to choose a new director Thursday as a standoff emerged between the United States and Europe over the best candidate for the job.

In a closed-door vote, the IMF's 24-member executive board failed to muster a majority of support for any of three candidates for the managing director job vacated by France's Michel Camdessus last month.

The European Union, outraged by the United States' flat rejection of its candidate, Caio Koch-Weser, made good on its pledge to present a united stand behind the German finance official and longtime World Bank bureaucrat, who won the largest share of votes from the board despite U.S. qualms about his credentials.

But Mr. Koch-Weser did not receive enough backing from countries outside Europe to clinch the job. The board adjourned in gridlock with no plan of action to winnow the field of candidates or conduct another vote.

As the rift with Europe deepened, President Clinton surprised observers by rejecting another leading candidate for the job: Stanley Fischer, an American citizen who currently is the IMF's deputy managing director.

Mr. Fischer received the second-most votes in Thursday's straw poll, according to the IMF, but 36 percent of the board members abstained from the balloting, apparently including the United States and several Third World representatives. Individually, the United States has the biggest share of votes, at 17.35 percent, but the various European delegates command more than a third of the votes.

Mr. Fischer was nominated by African states, who contend his hands-on experience at the agency during the Asian crisis makes him best qualified for the job. Mr. Clinton's surprise rejection appeared aimed at allaying European fears that the United States was secretly conspiring to elevate the American candidate.

"I will not support an American candidate, even though I have enormous respect for Mr. Fischer," Mr. Clinton told reporters at the White House. "I think the Europeans should lead the IMF, and it would suit me if a German led the IMF."

Republican aides on Capitol Hill were surprised that Mr. Clinton rejected what they regard as the best candidate from the American point of view, since Mr. Fischer has been sympathetic to the U.S. goal of refocusing the IMF on its original mission of providing emergency aid to nations in financial crisis.

Treasury Secretary Lawrence H. Summers this week said that the IMF should stop providing "long-term welfare for countries that cannot break the habit of bad policies" a sentiment widely shared in Congress.

Mr. Clinton insisted the United States had no secret agenda in opposing all of Thursday's candidates, including Japan's Eisuke Sakakibara, other than to hold out for a better candidate, one who is respected on both sides of the Atlantic.

"Nobody's playing any games here. We want the strongest possible person in the world to head it. It's a big, big, important job," he said.

Reports coming out of Europe Thursday said the European Union was likely to withdraw Mr. Koch-Weser's candidacy if he didn't receive majority backing from the IMF board.

Mr. Koch-Weser told a European newspaper that he most likely was rejected because he opposes any narrowing of the IMF's mission.

"Crisis management in emergencies is not enough on its own," he said in an interview this week with the daily Sueddeutsche Zeitung newspaper.

Mr. Koch-Weser said the differences between the United States and Europe, which wants to expand the IMF's international regulatory powers, must be "battled out."

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