IMF's Georgieva says she'd be honored to serve second term if nominated

WASHINGTON: International Monetary Fund chief Kristalina Georgieva said she would be honored to serve a second five-year term at the helm of the global lender, and had been assured there was a strong support for her candidacy among European IMF members and beyond.

Georgieva, a Bulgarian economist whose current term ends on Sept. 30, last week won the backing of French Finance Minister Bruno Le Maire, who said she had done a “great job” leading the institution and that France would support her for a second term.

Georgieva, 70, told Reuters in an interview that she spoke at length with the Bulgarian central bank governor on Thursday, who asked her if she would serve if nominated. She said he cited strong support for her among European members, other advanced economies, emerging markets and low-income countries.

“My answer is, yes, if there is broad support across the membership, I will be honored to continue to serve,” Georgieva said. “The fund is this steady ship going through choppy waters, and I would be so grateful to the membership if they elect me for a second time to be a captain on this ship.”

Georgieva, who was CEO of the World Bank before heading the IMF and had previously served on the European Union’s executive body, said she had gotten positive signals all around, with many lauding the fund’s swift action when needed and its work to keep members united under the most difficult circumstances.

Le Maire’s support was critical, given that European countries traditionally nominate a candidate to lead the IMF, although all European Union members must agree. That decision is expected to come at a Eurogroup meeting on Tuesday.

The final decision is made by the institution’s board of directors.

‘ETERNAL OPTIMIST’

Georgieva, the IMF’s 12th managing director since its founding in 1944, is the second woman to head the IMF and the first person from an emerging market economy.

Keeping Georgieva on for a second term would help answer longstanding concerns raised by emerging market and developing countries over the U.S.-European duopoly at the two global financial institutions, the IMF and World Bank.

It is not unusual for someone to serve a second term. Georgieva’s predecessor, Christine Lagarde, was named to a second term but stepped down early to become the head of the European Central Bank.

A self-described “eternal optimist,” Georgieva has weathered huge shocks to the global economy ranging from the outbreak of the COVID-19 pandemic just months after she took office to the February 2022 Russian invasion of Ukraine.

She said her biggest priorities for a second term would be to bolster prospects for medium-term growth, which is lagging historical levels, managing the ongoing sovereign debt challenges, and guiding the IMF through a complicated quota revamp that boosts the process of representation.

“The way I see the years ahead, we have to be in a position of more agility in policies and the capacity of countries to withstand these more frequent shocks, keeping them together, keeping them cooperating, and yet recognizing … that geopolitics plays a big role in economics,” she said.

Georgieva drew criticism inside and outside the IMF early on for her push to include climate change as a factor in surveillance reports on member countries’ economies and her great interest in emerging market and developing economies.

She’s been instrumental in securing large loans for Ukraine, helping to catalyze additional funds to help its economy weather the strains of the two-year-old war against Russia’s invasion, overseen a revamp of Argentina’s massive loan program and worked steadily to help China embrace sovereign debt restructurings.

She also survived a big personal challenge in 2021 when the IMF’s executive board expressed its full confidence in her after reviewing allegations that while working at the World Bank she pressured staff to alter data to favor China.

Sources familiar with the process said the selection would be settled quickly once Europe unites around a candidate.

While Georgieva’s term won’t end for months, some say it makes sense to make decisions before the April spring meetings of the IMF and World Bank, so the leadership issue does not overshadow the already full agenda for the meetings.