Berlin may launch bid for euro-zone job

Date: 18/05/2000

By Tim Jones

GERMANY'S unsuccessful candidate to head the International Monetary Fund is considering a dark-horse bid to become one of the euro zone's most powerful representatives.

State Secretary for Finance Caio Koch-Weser is said to be interested in taking over the chair of the EU's Economic and Financial Committee (EFC) soon to be vacated by Frenchman Jean Lemierre, who is set to take over as president of the European Bank for Reconstruction and Development (EBRD).

At a time when the euro has fallen into disrepute in the German press in the wake of its decline to well below parity against the US dollar, Koch-Weser's election as head of the secretive but powerful EFC would play well in Berlin. He is said to be well-liked by his peers and, following his IMF humiliation, can rely on the support of Chancellor Gerhard Schröder and backing from the British and French finance ministries which damned him with faint praise when he was seeking the IMF job.

Senior monetary officials say the greatest hurdle to him getting the job is Italian treasury chief Mario Draghi, who is by far the most senior member of the EFC and is well-known on the international policy-making circuit.

Draghi stood against Lemierre when the Frenchman won the EFC job in January last year, and there has been speculation that Lemierre secured the post by promising Draghi that he would take over after two years. This has never been confirmed by either man.

Paris would love to keep the job but, since Lemierre's replacement at the French treasury is likely to be a non-EFC member, Paris has accepted that it is beyond its reach.

The EFC, which is made up of senior officials from all Union finance ministries, central banks and the European Commission, prepares legislation and sets the agenda for Euro-11 meetings.

Germany's unsuccessful candidate to head the International Monetary Fund is considering a dark-horse bid to become one of the euro zone's most powerful representatives.