Russia challenges EU over IMF top job

MOSCOW: Russia on Wednesday gatecrashed the traditional EU monopoly on choosing the head of the IMF by naming its own candidate and challenging the European Union to allow fair competition for the post.   

In a surprise statement, Moscow announced it was nominating former Czech central bank chief Josef Tosovsky to stand against the EU's candidate to head the International Monetary Fund, former French finance minister Dominique Strauss-Kahn.   

"We have conducted wide consultations with colleagues from other countries and we are certain that the majority want a managing director to be chosen on a competitive basis for professional qualities," the Russian finance ministry said.   

"That is why we have chosen to put forward an alternative candidate," the statement continued.    

An unwritten agreement within the IMF -- an international lending organisation that specialises in aiding poor countries and developing economies -- stipulates that the European Union chooses new IMF heads.   

The World Bank, another international lending institution based in Washington, is traditionally named by the United States. Last month, a group of 24 developing countries, including China, India and Brazil, protested against the carve up of the jobs between the EU and the United States and called for "a transparent selection process".   

In a further twist on Wednesday, the government in the Czech Republic, which joined the EU in 2004, rejected Tosovsky's bid and reaffirmed backing for the EU's choice.   

Moscow's challenge to the status quo reflects a drive to reestablish Russian diplomatic, financial and military influence worldwide on the back of massive revenues for the world's biggest energy producer, analysts said.   

Russian President Vladimir Putin earlier this year called for a revolution in world economic relations, saying international institutions created by the West were "archaic, undemocratic and inflexible".   

"Because of oil exports, Russia has a lot of resources, and its potential has increased a lot," said Vasily Solodkov, head of the banking institute at the New Economic School in Moscow.   

However, Solodkov predicted that Tosovsky had "zero chance" of breaking the EU stranglehold on the IMF leadership.   

Tosovsky's nomination makes him the only rival to Strauss-Kahn to succeed outgoing chief Rodrigo Rato, who has announced he will step down in late October, two years before the end of his term.   

The IMF has said it will accept applications for the post until August 31, and the executive board will then consider the candidates in September.    

After the nomination of Strauss-Kahn, the IMF issued a statement saying the leadership contest was open to any national of the Fund's 185 member countries in an clear attempt to show the openness of the selection process.   

Russia was a major IMF debtor during the 1990s when billions of dollars from the institution helped keep the Russian economy afloat. Under Putin, it has paid back its full 22 billion dollars of debt.   

Tosovsky currently heads the Financial Stability Institute (FSI) for the Bank for International Settlements in Basel, Switzerland. He was twice head of Czech central bank, from 1993-1997 and again in 1998-2000, and also served as prime minister in 1998.   

Last February, newspaper Dnes denounced him as a former collaborator of the communist secret police before the fall of the country's totalitarian regime in 1989. Tosovsky denies the allegation.   

In a statement to Czech news agency CTK on Wednesday, Tosovsky said he was "delighted" by Russia's proposal.   

"It's a big honour for me to be proposed," he said.