Brown ally Rodrigo Rato poised for top IMF job

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The Independent Online

Gordon Brown last night appeared to have secured the appointment of a key ally as the new head of the International Monetary Fund.

Gordon Brown last night appeared to have secured the appointment of a key ally as the new head of the International Monetary Fund.

Rodrigo Rato, the former Spanish finance minister, looks set to be named managing director of the IMF at its annual spring meetings that begin tomorrow. Mr Rato beat Jean Lemierre, the head of the European Bank of Reconstruction and Development, whom France and Germany had backed strongly.

EU finance officials re-elected Mr Lemierre for a second term at the EBRD. Nicolas Sarkozy, the French finance minister, said Mr Lemierre would serve the full four years, clearing the way for Mr Rato, 55, to take the IMF job.

The Chancellor, who is chairman of the IMF's key international monetary and financial committee, was asked by his fellow EU finance minister to canvass the 184-strong IMF membership for their views. Mr Brown built up good relations with Mr Rato during his tenure as Spain's finance minister until last month's general election upset. The UK was understood to be concerned about a Franco-German coalition behind Mr Lemierre.

Karl-Heinz Grasser, the Austrian finance minister, said a majority of EU states favoured Mr Rato. He is understood to have received the backing of the United States as well as emerging market economies, especially those in Latin America. Last week 17 Latin American nations, led by Brazil and Argentina - which had mixed relations with the former IMF chief Horst Kohler, said they backed the Spaniard.

The top job has gone to a European since the IMF was set up 60 years ago, despite demands from poorer countries for better representation at an organisation that has huge influence in the developing world.

Meanwhile, the World Bank said developing economies should enjoy the strongest growth in two decades in 2004 as the global recovery firms, but warned a sudden rate rise could harm the outlook. The bank urged policy makers to prepare now for a possible rise in borrowing rates and to avoid overexposure to short-term foreign debt. The OECD also called for a European rate cut to boost economic recovery yesterday.

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