Pohl could become president of EBRD: International figures rounded up to replace Attali

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KARL OTTO POHL, the former head of the Bundesbank, is among several leading international financial figures who are being sounded out to replace Jacques Attali as president of the European Bank for Reconstruction and Development.

The appointment of such a prestigious figure as Mr Pohl would be seen as a decisive break with the past and certain to guarantee a change of culture at the beleaguered bank, where work has almost ground to a halt because of collapsing morale and internal strife.

Anne Wibble, the Swedish Finance Minister and chairwoman of the EBRD, is to call a meeting of the bank's senior shareholders to discuss the succession to Mr Attali, ahead of the Tokyo economic summit of the seven leading industrial countries, which takes place from 7-9 July.

In a statement yesterday, Mrs Wibble said she 'understood and respected' Mr Attali's decision to resign. In a muted tribute she said: 'I acknowledge that the institution has become fully operational with remarkable speed under the energetic leadership of Mr Attali. I am convinced that the achievements of the bank will be fully recognised once the recent turbulence has subsided.'

In addition to the former Bundesbank president it is understood that Jean-Claude Trichet, the highly respected head of the French Treasury, will be put forward by his own government.

But the Franco-British agreement under which the head of the bank would be a Frenchman in exchange for locating the headquarters in London has been torn up as a result of the fiasco of Mr Attali's presidency, according to sources at the bank and among the Group of Seven.

Onno Ruding, the former Dutch finance minister who originally vied with Mr Attali for the job, has also been put forward. Like Mr Pohl he has the advantage of not being tied full-time to a single job.

He could move in quickly to satisfy concern that Mr Attali should leave as soon as possible to allow a restoration of morale and an injection of new blood.

Another rumoured candidate is Michel Camdessus, the French managing director of the International Monetary Fund. However, his contract in Washington has about three years to run and there is likely to be little incentive for him to move.

The United States is expected to encounter stiff resistance to any attempt to install an American such as Ernie Stern, number two at the World Bank, who had been offered the job of deputy to Mr Attali. This offer has lapsed.

There has also been a proposal to appoint a short-term interim president, Claes d'Niergaard, the Swedish director who is head of the committee investigating EBRD overspending.

But Mr Attali agreed yesterday morning in a telephone conversation with Mrs Wibble that he would stay until his successor had been appointed and had taken office, so Mr d'Niergaard may not be needed to take up the temporary post.

As well as discussing the succession in Tokyo, the main shareholders, the Group of Seven, are expected to review the mandate given to the EBRD when it was set up in 1990.

This called for 60 per cent of its lending to go to the private sector and the remainder to the public sector.

The G7 is keen to maintain the emphasis on the private sector, but has acknowledged that in the East the private sector is insufficiently developed to lend money at the rate required.

The compromise may be to allow public sector lending a bigger slice temporarily, with a timetable for getting back on track. Much will depend on the character of the new president.

Fears of a permanent lurch to public sector lending were a key reason for opposition to a reorganisation plan backed by Mr Attali and bringing in Mr Stern.

(Photographs omitted)

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