Attali in danger as EBRD reorganisation plan founders: No support for changes that would protect president's job

Click to follow
The Independent Online
JACQUES ATTALI, president of the European Bank for Reconstruction and Development, was yesterday facing the possibility of losing his job as support for a controversial reorganisation plan for the bank collapsed.

Sources close to discussions over the future of the EBRD said the main industrial country shareholders had backed away from the plan, devised to distance Mr Attali from day-to-day management while leaving him in overall charge.

Bankers believe the collapse of the plan, which Mr Attali strongly supported because it would have kept him in his job, will leave him wide open to critics when an audit committee report on the bank's lavish spending is delivered next month.

The committee's report is expected to be damaging to Mr Attali and could provide the leverage to have him removed.

The main question is how strongly he will be supported by his French sponsors who insisted, as part of the deal that brought the EBRD to London, that its head would be French. Bankers said there was a difference between proving lavish spending and wrongdoing serious enough to remove him.

The plan, devised by officials in the Group of Seven countries, would have shifted the emphasis of the bank away from financing the private sector towards more traditional development finance.

It was hoped to gain approval by the board ahead of the audit report on 15 July. By getting it through in advance the blow to Mr Attali's standing from the audit report would have been softened, but this protection has now been removed.

Anne Wibble, the Swedish finance minister who chairs the bank, is said to want to put off decisions on its future until after the audit report.

The G7 plan was resisted by many of the directors on the 23-strong board at a meeting on Monday because they felt they were being bounced by the big industrial countries into drastically changing the bank's character into something much more like the World Bank. Now the G7 is backing down.

Part of the plan was to bring in Ernest Stern, number two at the World Bank, as chief operating officer.

A key factor in fomenting opposition to the plan was that this, and a second outside appointment, would have demoted Ronald Freeman, first vice-president of the bank, to number four.

Mr Freeman is the highly regarded spearhead of the bank's private sector lending and his demotion would have highlighted concern about the bank's change of direction.

At Monday's board meeting Mr Freeman attacked his boss for misleading him over the reorganisation plan.

Comments