EU finance ministers have unanimously backed the German head of the European Bank for Reconstruction and Development (EBRD), Mr Horst Kohler, as their candidate to head the International Monetary Fund (IMF). He is now certain to get the job.
The move, at a meeting in Brussels yesterday, follows the humiliating withdrawal from the contest by the previous German candidate, Mr Caio Koch-Weser, after strong US opposition to what it saw as a light-weight candidate.
The job is seen as traditionally an EU one under a gentleman's agreement with Washington which gives its man the chair of the World Bank. The EU controls a third of the shares, and hence votes, in the IMF.
Although the US has not yet indicated publicly its view of Mr Kohler's stature, diplomats say the German Chancellor, Mr Gerhard Schroder, has received assurances of support from President Clinton.
Mr Schroder, who championed Mr Kohler's campaign, ohler, is understood to have had to persuade the Italian Prime Minister, Mr Massimo D'Alema, who has been publicly pushing the candidature of former prime minister Mr Giuliano Amato. The latter's name may well feature prominently in the next round of international appointments.
Mr Kohler is a career civil servant long associated with Dr Helmut Kohl, Germany's former chancellor. As secretary of state in the finance ministry from 1990, he played a key role in negotiating the ground rules for the single currency and finding the cash to pay for German reunification.
Later he was appointed head of the federation of savings banks and played an important part in reassuring a vulnerable section of the German financial sector ahead of the introduction of the euro. He has been head of the EBRD since May 1998.
Ministers yesterday also discussed a paper from the Internal Market Commissioner, Mr Frits Bolkestein, on the desirability of allowing member-states to impose duty on aircraft fuel. Some states see the measure as a way to curb greenhouse gases but Mr Bolkestein warned it would produce serious distortions to the world market unless introduced by global agreement.
The tax was strongly opposed by the Minister for Finance, Mr McCreevy, who said such a measure would be discriminatory against Ireland because of its geographical position and hence greater dependence on air travel.
Because the same obligations would not be imposed on competitors outside the EU, it would also give US airlines a significant competitive advantage. He was supported by Spain and Greece.
Mr McCreevy later welcomed the decision by Greece and Denmark to step up their efforts to join the euro but said he did not expect Britain to join until around 2004.
