- The Washington Times - Thursday, March 4, 2004

ASSOCIATED PRESS

Horst Koehler, the head of the International Monetary Fund, announced his resignation yesterday to become a candidate for the presidency of Germany, a largely ceremonial post.

He said Anne Krueger, an American and one of his deputies, will be acting managing director of the 183-nation international financial institution until the IMF’s board names a successor.

“I am very honored to be nominated for the office of president of the Federal Republic of Germany and I have accepted the nomination,” Mr. Koehler said at a news conference.

The election, which in Germany is the responsibility of the Federal Assembly, will be held May 23. He said that in conformity with the rules of the IMF, his resignation would be effective immediately and he would work with Mrs. Krueger to assure a smooth transition.

“I accepted the nomination with ‘a laughing and a crying eye,’ as we say in German,” Mr. Koehler said. “I fully expected to stay at the IMF and continue working on our unfinished agenda.”

Before taking over as head of the IMF in May 2000, Mr. Koehler, 61, was president of the European Bank for Reconstruction and Development. Before going to the development bank, he worked for more than in a decade in the German Finance Ministry under former conservative Chancellor Helmut Kohl.

He was involved in the German reunification process and helped shape the legal framework for the introduction of Europe’s single currency, the euro.

Mr. Koehler declined to go into detail about who might succeed him, saying that was up to the 24-member executive board.

Under an informal agreement after World War II, when the IMF and the World Bank were established, the bank is headed by an American president and the fund is led by a European managing director.

Word of Mr. Koehler’s pending nomination followed a meeting in Berlin of the Christian Democratic Union, which lasted until early yesterday. An official, who spoke on the condition of anonymity, said two smaller parties, the Bavaria-only Christian Social Union and the Free Democrats, had given their approval.

Mr. Koehler took the lead at the IMF after a bitter trans-Atlantic battle in which the United States rejected Germany’s first choice for the job, Caio Koch-Weser, then a World Bank executive, as not sufficiently experienced.

At the time, some officials and business executives questioned whether he was up to leading a major financial organization at a time when it was heavily criticized for imposing wrenching economic reforms in exchange for emergency loans.

The search for a replacement for Mr. Koehler is likely to be discussed at a meeting of European Union finance ministers Monday, European officials said.

The president of the European Bank for Reconstruction and Development declined to comment yesterday on whether he would be interested in replacing Mr. Koehler as IMF chief. Jean Lemierre of France succeeded Mr. Koehler at the bank when the German left to become head of the IMF in 2000. Another candidate is Andrew Crockett, a Briton who formerly headed the Bank for International Settlements.

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