Having an Irishman at the head of the IMF would be ‘very prestigious for this country,’ according to Newstalk’s Business Correspondent.
It emerged over the weekend that Public Expenditure Minister Paschal Donohoe is considering throwing his hat in the ring to replace the IMF’s (International Monetary Fund’s) current managing director.
Bloomberg reports that the Fine Gael Minister and Eurogroup President is holding preliminary talks with the IMF about his candidacy.
On Newstalk Breakfast this morning, Newstalk Business Correspondent Joe Lynam said he is “certainly in the mix” for the esteemed role, with the current chief Kristalina Georgieva set to bow out in September 2024.
Well placed
Joe said Mr Donohoe is now in a favourable position to lead the organisation.
“Dublin Central TD Paschal Donohoe is very well respected, he’s President of the Eurogroup and was re-elected only last year,” said Mr Lynam.
“He would be well placed [to head the IMF], according to sources, as he knows Janet Yellen, the Secretary-Treasurer of the US.
“He’s also a very liked person on the international stage and would be well placed as a European candidate to get the top job in the IMF.”
The potential bid could be bad news for Fine Gael, according to Mr Lynam.
“The Fine Gael party are a bit nervous now, they’re saying ‘will we lose a seat’ here in Dublin Central,” he said.
“It would be a massive job for him and it would be very prestigious for this country as well and I think he would be very well placed for it.”
International arrangement
A longstanding arrangement in the international finance community also has a role to play.
“There was a divvying up of jobs at the Bretton Woods Conference in 1944 that means a European gets the IMF job and an American gets the top job at the World Bank,” said Mr Lynam.
“Basically, if the Americans back a European candidate the Europeans, then back the American candidate to get the top job at the World Bank.
“There’s a lot of water under the bridge before we get to a decision on this but Paschal is certainly in the mix by the sounds of things.”
IMF History
Mr Lynam gave some history as to what the organisation does.
“The IMF came about during post-WWII reconstruction of the financial world,” he said.
“The World Bank was set up as a way of lending money to very poor countries and getting them on a development path.
“The IMF was a way of providing money to countries who no one else, including the international money markets, will not lend to.”
Ireland has benefited from the IMF “as recently as a decade ago,” added Mr Lynam, as the country was bailed out in the aftermath of the 2008 financial crash.
