Bank of France governor to land EBRD job

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JACQUES DE LAROSIERE, the governor of the Bank of France, will this week be elected president of the scandal-torn European Bank for Reconstruction and Development, international monetary officials say.

The Frenchman is well ahead in the race to replace Jacques Attali, the former president who was forced out last month over the bank's lavish spending practices, sluggish lending to the impoverished East and improper use of EBRD funds.

Officials said he looked certain to win in Wednesday's election, following the withdrawal of one rival, Guiliano Amato, the former Italian prime minister, and lack of support for the other, Leszek Balzerowicz, the former Polish finance minister.

To win, Mr de Larosiere must secure a majority of the 59 votes cast by shareholders. But those votes must also represent more than half the shares held by the national governments that set up the bank two years ago to help the former communist bloc change to free markets.

Most EC member states, which together represent a shareholding of more than 50 per cent, have backed Mr de Larosiere. The US and Canada (jointly holding 13.4 per cent) are also understood to support the French official.

Anger at being forced to accept another Frenchman after the debacle of the Attali presidency has given way to recognition that Mr de Larosiere, a former managing director of the International Monetary Fund, represents a safe pair of hands. His election would be a badly needed diplomatic victory for France, after the disastrous setback for its franc fort policies.

After the Attali scandal, it was assumed that the Franco-British agreement, under which the bank was based in London in exchange for a French president, was defunct.

Mr de Larosiere is expected to be given a four-year term, not just the remaining two years of Mr Attali's presidency.