US opposes Lawson's OECD bid

ODDS on the British bid to place Lord Lawson at the head of the Organisation for Economic Co-operation and Development have lengthened sharply with the emergence of US opposition to a European appointment and a growing field of alternative candidates.

When the Government announced last week that it was proposing Lord Lawson as the new OECD Secretary-General, it drew a mixed reaction from foreign capitals. Some diplomats said a Lawson appointment would raise the profile of the organisation. Others in the 24-member club of industrial countries worried that the former Chancellor's turbulent political career makes him unsuitable for the job.

With US backing, Canada has proposed Donald Johnston, a former cabinet minister in Pierre Trudeau's government and now president of the governing Liberal Party. Germany has fielded Lorenz Schomerus, a senior trade negotiator. And the current incumbent, Frenchman, Jean- Claude Paye, has offered his services again when his current term expires in September.

Although the French government has yet to back him publicly, it has made private representations on his behalf in Washington and Bonn.

Lord Lawson's chances of winning the pounds 125,000-a-year tax-free post rests on his considerable reputation as a politician and on his economic skills. It also depends on the desire of many governments to inject new life into an institution they regard as having lost ground as a forum for economic policy co-operation, even if its economic analysis remains highly regarded.

Many governments would like to appoint a senior politician rather than a bureaucrat, like the current incumbent.

The governments of some members would also like to break French hegemony over the leadership of international institutions. In addition to the OECD, Frenchmen lead the EU, the IMF and the EBRD. Thus the former Chancellor's criticism of the OECD as an institution that has 'outlived its usefulness' does not necessarily detract from his candidacy. In his memoirs, Lord Lawson urged that OECD economists, whose work he praised, be taken under the wing of the International Monetary Fund, while he criticised the ministerial meetings as 'a waste of time and money which even causes member countries to maintain a full-time ambassador to the OECD, ensconced in an expensive Paris residence'. If elected, the former Chancellor stands to benefit from a luxury apartment in the hyper-chic 16th arrondissement.

But the US, Canada and Japan have concluded that a non-European should be appointed to head the OECD to reflect the growing importance of relations between the industrial West and the new economic powers in Asia.

The OECD has already accepted Mexico as a member and South Korea has applied to join. Poland, Hungary and the Czech Republic are also knocking on the door.

The issue may come up at a meeting of finance ministers of the countries that make up Group of Seven near Frankfurt on 26 February. But the debate could drag on until summer.

Despite the American stand, Britain is hoping to secure the support of Edouard Balladur, the French Prime Minister. Mr Balladur knows Lord Lawson well and is indebted to Britain for supporting the appointment of Jacques de Larosiere as president of the London-based EBRD after his predecessor, Jacques Attali, departed in disgrace.

The US position may also be undermined if the Europeans swing behind a consensus candidate.

It is far from clear, however, that Germany is ready to support Lord Lawson.

(Photograph omitted)