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It will be tight for the world’s leading economic politicians.
Kristalina Georgieva, the head of the International Monetary Fund, is set to welcome policymakers from around the world this week after fending off an investigation into allegations she tampered with data on China’s global reputation among businessmen and women while serving as World Bank executive To improve investors.
Top Treasury Ministers and central bankers fly to Washington to receive the IMF and World Bank half-yearly pow-wow. It should be a moment to celebrate. Finance ministers from the G20 countries will use the opportunity to seal a global tax treaty that was signed by 136 nations last week and that paves the way for an international minimum tax rate of 15 percent for companies.
But the meetings are tarnished by controversy – and not only has Georgieva’s reputation suffered, but the World Bank’s reputation as a neutral and trustworthy source of economic data.
The Bulgarian woman’s job is safe for the time being after the IMF’s Executive Board said on Monday that it had “full confidence” in her “leadership and ability to continue to perform her duties effectively”. The focus of the panel’s deliberations was an investigation released last monthwho accused Georgieva of pressuring World Bank staff to improve China’s ranking in the annual ranking Doing business report for 2018.
The report was an annual flagship publication that examined how business-friendly countries are by examining how their rules and regulations encourage or restrict business activities. The global lender completely dismissed the report last month in response to the scandal, and one accompanying it opinion that “trust in the research of the World Bank Group is vital”.
Georgieva repeated disputed the results of the investigation that according to from her lawyer, Lanny Breuer of Covington & Burling, to draw inappropriate and untenable conclusions about her behavior and state of mind.
You must know that about the scandal.
Who is Kristalina Georgieva?
Georgieva returned to the World Bank in 2016 after six years at the European Commission where she held the prestigious post of Budget Commissioner. The World Bank was her familiar territory, having spent 17 years there and having risen to become vice president of the international lender. She is held in high regard in Brussels, where many officials sympathize with the situation in which she finds herself.
However, her exit from the EU capital was not without controversy after a dispute with the then Secretary General of the Commission, Martin Selmayr.
Three years after her return to the World Bank, Georgieva was appointed as Managing Director of the IMF and replaced Christine Lagarde, who became President of the European Central Bank.
EU capitals, led by France, fought hard to get Georgieva’s appointment to ensure a European remains at the helm of the IMF amid concerns that China, Japan and Singapore might be scrambling for the job. Traditionally, the IMF is run by a European, while the World Bank President comes from the US, which supported the EU’s ambitions to keep the post of IMF. The IMF Executive Board even lifted an age limit of 65 for its executive director so that Georgieva (then 66) could get the job.
What is the scandal?
The World Bank hired an American law firm called WilmerHale To lead an investigation into the allegations, its President Jim Yong Kim and Georgieva put pressure on the institution’s staff to improve China’s ranking in their 2018 Doing Business Report. The World Bank leadership at the time was on a mission to raise capital from stakeholders, including China, which complained about its 2017 ranking of 78.
Senior Chinese government officials met with World Bank staff and Kim and had dinner with Georgieva to campaign for an improved ranking for 2018 when China’s rating should drop to 85. Georgieva and Kim’s employees then intervened, according to WilmerHale. Keep China’s rating at 78 to ensure its capital-raising efforts are not jeopardized.
“Employees felt that they could not contest an assignment for the bank’s president or CEO without risking their jobs,” the investigation said. WilmerHale’s findings also outlined irregularities in the calculation of Saudi Arabia’s ranking in the Doing Business 2020 edition.
Georgieva has, however, put it on record “in principle”. be of different opinion with the findings of the US law firm. They also dismissed the results of the report in one opinion at the request of the IMF Board of Directors. Regardless of the investigation, Kim resigned from his position in early 2019
Who supported whom?
EU capitals backed Georgieva despite the scathing investigation. Two officials told POLITICO that EU diplomats had met over the weekend to ensure that such assistance could be pushed through to the Executive Council, where the countries were hold a share of the vote depending on their participation in the fund. But Europe’s votes would not have been enough without US help to keep Georgieva in her job.
That drew all eyes to US President Joe Biden, whose administration has taken a firm stance on Beijing amid growing tensions over Chinese military armament in the South China Sea and uncertain trade relations. Senior US Senators had written to Biden, calling on him and the Treasury Department to carefully examine the World Bank scandal and “ensure full accountability”.
“Although Ms. Georgieva has stated that she ‘fundamentally disagrees with the results and interpretations’, she has provided no evidence to contest them,” wrote Democrat Bob Menendez and Republican James Risch in their letter. “It is imperative that the World Bank, the IMF and above all Ms. Georgieva are immediately and fully transparent and cooperative.”
Johanna Treeck and Giorgio Leali contributed to the coverage.
This story has been updated.
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