Sign in
Become a MarketWatch member today
Marsh on Monday
May 23, 2011, 12:01 a.m. EDT
By David Marsh, MarketWatch
BEIJING (MarketWatch) "” As Dominique Strauss-Kahn gives a new meaning to the International Monetary Fund's programs of enhanced surveillance, international horse-trading is intensifying over who should replace the Fund's disgraced former managing director.
It would seem a thoroughly good thing for a representative of one of the emerging economies to take over the job. With his bail release to a safe address in Manhattan, Strauss-Kahn's noble yet distinctly lived-in features "” a cross between Al Pacino and Jean-Paul Belmondo after they'd not shaven for three days and then had a fight "” are due to be banished at least temporarily from our TV screens.
A new image is surely required: the specter of the two original Bretton Woods powers, the U.S. and Britain, uniting in common sense. President Barack Obama and his perfectly formed accomplice, British Prime Minister David Cameron, should stride before the TV cameras, and jointly state that it's time for a non-European to take the helm at the IMF.
Caitlin Flanagan uses the recent scandals involving Arnold Schwarzenegger and Dominique Strauss-Kahn to offer her own take on how men treat maids.
Something tells me that this is not going to happen, at least not straight away. Over the weekend, Britain's Chancellor of the Exchequer George Osborne declared he was backing the front runner, Christine Lagarde, the French finance minister. Even though Cameron recently had suggested the IMF should look beyond Europe for its next chief, Osborne said the French minister was "the outstanding candidate" and had "shown real international leadership as chair of the G20 finance ministers this year"¦. We support her because she's the best person for the job."
It's difficult to know whether Osborne's statement is based on a deeply held political position "” or whether it's a clever gesture to curry favor with other Europeans, masking Britain's readiness to back down if a serious candidate emerges from the developing world.
Australia and South Africa, meanwhile, have fired a warning shot across Europe's bows, warning over the weekend that "for too long, the IMF's legitimacy has been undermined by a convention to appoint its senior management on the basis of their nationality" "” a statement that may indicate that a candidate such as former South African Finance Minister Trevor Manuel could be moving up in the stakes.
The overriding consideration should be that paving the way for an African, Asian or Latin American to move into the top position would be a way of ensuring that rapidly developing countries take real responsibility commensurate with the growing financial power on the world stage.
Within less than a week of Strauss-Kahn's arrest on sex changes in New York, the haste with which European countries cast down their beach towels around the IMF pool cast little credit on the protagonists. German Chancellor Angela Merkel's assertion that Europe needs its own candidate to ensure a happy ending for the European debt crisis simply beggars belief.
French officials have already occupied the IMF managing directorship for 36 years out of the 65 years the Fund has been in existence. True, Lagarde has been a stalwart finance minister and cuts a dapper figure at ministerial gatherings. By getting on in a civilized manner with Wolfgang Schäuble, her German opposite number, she has contributed to greater cohesiveness between Germany and France "” especially by comparison with the way that her predecessor, one Nicolas Sarkozy, regularly chose to clash with his German counterpart, Peer Steinbrück.
But pushing her candidature while the ink is still not dry on Strauss-Kahn's charge sheet has a touch of desperation to it. Is Europe really in such a parlous state that it needs a Euro devotee to ensure the currency bloc doesn't fall apart?
Merkel's jumping on to the "jobs for the Europeans" bandwagon looks like a sign of provincialism, at best. Germany is the country in Europe that most profits from globalization, yet Merkel seems on occasion to be the archetypal backwoodswoman. I can only assume that she'd been put up to it by Sarkozy.
A more balanced way of looking at this is provided by a senior Chinese official with whom I talked in Beijing, who stressed the importance of the European currency as a counterweight to the otherwise untrammeled status of the dollar. "Chancellor Merkel can be assured that, if an Asian official took the IMF seat, then we'd be equally intent on maintaining the euro."
David Marsh is chairman of London and Oxford Capital Markets.
"Hong Kong stocks open sharply lower; factory blast hits Foxconn; Hang Seng Index down 1.4% http://on.mktw.net/kk4e2c" 8:34 p.m. EDT, May 22, 2011 from MarketWatch
"Japanese stocks open lower, with banks among leading decliners; Nikkei Average down 1% http://on.mktw.net/kSpprD" 7:08 p.m. EDT, May 22, 2011 from MarketWatch
"RT @MWRadio: Shaky housing market faces more scrutiny this coming week. Andrew O'Day and Tracy Johnke report. http://fb.me/10kIxtiCq" 5:37 p.m. EDT, May 20, 2011 from MarketWatch
"As of late, investors have been migrating toward shares of $PEP, $KFT and other U.S. consumer-staples companies http://bit.ly/iD9w2P" 5:04 p.m. EDT, May 20, 2011 from MarketWatch
"Health care is up 9.6% since the end of the first quarter; consumer staples up 8%, and utilities up 6.6%. http://bit.ly/jGcW41" 4:27 p.m. EDT, May 20, 2011 from MarketWatch
Ways and Means
Don't let fear ruin your retirement plans
Home Economics
Be a nosy neighbor at nearby open houses
This Week in China
Baidu censorship lawsuit in focus
Wall Street Irregulars
Gold bulls watching gold elephants
Marsh on Monday
Time for Europe to surrender IMF reins
Tech Investor
Sell Apple to buy LinkedIn
Consumer Confidential
Don't buy that car yet, whether new or used
Strength in Numbers
3 Dow stocks that are in a slow death spiral
On Retirement
The Social Security, Medicare meltdowns
Read Full Article »