The Canadian director's departure was revealed only days after the board thought it had strengthened its influence over the bank's budget-making process and accountability.
Donald McCutchan, Canada's executive director at the bank, is to return to Ottawa in July after Mr Attali complained personally to Brian Mulroney, the Canadian Prime Minister, over lunch in Ottawa last month.
Mr McCutchan was the only member of the 23-strong executive board, representing the countries owning the EBRD, to vote against a 40 per cent increase in the bank's operating budget to ecu 140m (pounds 10m). Though several other directors, including those from Britain and Germany, expressed strong dissatisfaction with the proposed increase, only Mr McCutchan objected outright.
According to sources close to the EBRD board, Mr McCutchan had acquired a reputation for being something of a thorn in Mr Attali's side. He has long campaigned against excessive spending by the bank, which spent pounds 55.5m on refurbishing its new headquarters, including pounds 750,000 for a marble entrance hall in One Exchange Square, while disbursements to East European countries have been running at low levels.
But Mr Attali, who has persistently resisted attempts by the directors to influence his policies, told the Canadian Prime Minister that Mr McCutchan was 'unfit' to be a director - a view not shared by the Canadian's fellow directors. Mr McCutchan was in fact simply carrying out the instructions of the Canadian Finance Ministry in questioning EBRD spending habits until the Prime Minister's withdrawal of his support for this line was revealed this week in Ottawa. Mr Mulroney is himself resigning as Prime Minister in June.
Disclosure of the Canadian director's departure coincides with attempts by leading shareholders to strengthen the board's powers and has raised concern that the message has not yet sunk in. Yesterday, Norman Lamont, the Chancellor, followed up criticism levelled at Mr Attali by Theo Waigel, the German Finance Minister. According to the Treasury Mr Lamont told the EBRD president that the lack of control over costs could no longer go on.
The issue of the bank's lavish spending and Mr Attali's acerbic relationship with his board is likely to overshadow next week's EBRD annual meetings, where attention should focus on the emerging free-market economies in Eastern Europe. Between 3,000 and 4,000 officials and bankers are attending the talks, which will cost the bank some pounds 1.7m.Reuse content