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Friday, 24 March, 2000, 15:46 GMT
New IMF chief pledges reform
Horst Koehler talks to journalists on Friday
The new head of the International Monetary Fund has promised to carry on reforms at the institution.

Germany's Horst Koehler was voted in on Thursday as the new chief of the 182-nation organisation.

He said he was honoured to be selected and felt well equipped for his new role.

"I do think that there is a need for some reform but we don't need to start from scratch," said 57-year-old Mr Koehler on Friday.

"There is already a lot in the pipeline. It is also now important to sort out what are the sustained structures for an improvement and strengthening of the IMF.

"If you evaluate the situation correctly, people will come to the conclusion that reforms are necessary and desirable, but they are not a revolution."

Mr Koehler, is currently president of the London-based European Bank for Reconstruction and Development (EBRD), and replaces Frenchman Michel Camdessus, who retired last month.

Mr Camdessus left the IMF in February
The appointment brings to an end a five months of disputes and lobbying for the top spot since the outgoing IMF managing director announced he was leaving.

Mr Koehler, an economist, has been at the helm of the EBRD since May 1998.

He was nominated for the job after the US blocked the appointment of Europe's first choice, German finance official Caio Koch-Weser.

Support then grew for Mr Koehler as rival candidates withdrew from the contest to leave him a clear field.

Japanese candidate withdraws

The rubber stamping came a week after IMF deputy Stanley Fischer withdrew his nomination, and Japan dropped its backing for former financial diplomat Eisuke Sakakibara to become head of the organisation.

Japan, which then backed Mr Koehler, had hoped to break with the tradition that a European always runs the IMF, while an American runs the IMF's sister institution, the World Bank, which lends to poor countries for development.

Despite Mr Koehler's appointment the future choice of IMF boss is likely to take a different course, as developing countries are pressing for a change in the procedure for selection to ensure a more open and democratic process.

Farce and conflict

The IMF will be hoping to put behind it the disputes which took on the element of farce when the United States, which holds a blocking minority vote, effectively rejected Germany's first choice to head the world organisation.

US President Bill Clinton opposed Mr Koch-Weser, calling him a political lightweight who lacked support from developing countries.

His candidacy had been promoted by the German government and - after a delay - had won reluctant approval from the European Union.

The German chancellor, Gerhard Schroeder, who was determined to win the post which has normally been held by a Frenchman, was then forced to turn to Mr Koehler, who had served under his predecessor, the Conservative Helmut Kohl.

The IMF, established after World War II, has had seven managing directors, three from France - among them Mr Camdessus, who held the post for 13 years - two from Sweden and one from Belgium and the Netherlands.

The IMF lends money to countries which are in deep economic trouble - including Mexico and Russia in the 1990s - but attaches conditions, often controversial, to recipient countries' economic policies.

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23 Mar 00 | Business
Growing row over IMF role
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The IMF and World Bank
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