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Germans see support mounting for IMF bid

BERLIN: Germany's drive to install new candidate Horst Koehler as head of the International Monetary Fund gained crucial momentum on Friday with Britain declaring its support amid signs Asian backing was growing.

A spokesman for Prime Minister Tony Blair said Britain would throw its weight behind Koehler, the head of the European Bank for Reconstruction and Development (EBRD) who stepped in after Berlin's first choice Caio Koch-Weser withdrew.

"We are supporting him," the spokesman said in London a day after Chancellor Gerhard Schroeder said he had been assured by Blair of Britain's backing.

Schroeder's spokesman said the British endorsement was an "important part" of the process of rallying support in the European Union behind Koehler, a 57-year-old conservative former Finance Ministry official.

"We are well on the way to agreeing on a common European candidate," spokesman Uwe-Karsten Heye told Reuters, adding that the 15-country bloc might back Koehler as soon as next Monday at a meeting of finance ministers in Brussels.

Winning comprehensive European support is a pre-requisite for taking Koehler's candidacy to the IMF executive board in Washington, where the United States and emerging countries will have a key say in whether it succeeds.

Germany hopes EU support will come together more quickly for Koehler than was the case with Deputy Finance Minister Koch-Weser, whose slim chances of U.S. acceptance were fatally damaged by a three-month struggle to achieve a consensus.

Schroeder also said Koehler had received support from Korean President Kim Dae-jung at talks in Berlin. Seoul had opposed Koch-Weser, sympathising with Japan's nominee Eisuke Sakakibara.

"The president expressed his hope that a consensus can be reached on this question. I also expect this," Schroeder told reporters after the pair met.

SIGNALS REMAIN MIXED

EU presidency holder Portugal warned earlier, however, that no consensus had yet been reached on a single challenger for a job which has been held by Europeans throughout the IMF's 50-year-old history.

Though it later said it was convinced that Horst Koehler will become the European Union's nomination.

Dutch news agency ANP reported the Portuguese Minister of Economic Affairs and Finance Joaquim Pina Moura said all European countries were unanimous over his nomination.

He had had frequent contact with his European colleagues and and was certain that Koehler would get support from all EU countries on Monday.

Pina Moura was in Noordwijk on the west coast of the Netherlands, speaking at a technology conference.

France has already backed Koehler, who served conservative former Chancellor Helmut Kohl as a deputy finance minister and summit "sherpa". But Italy has cast his credentials into doubt, saying he lacked the necessary authority for the top IMF job.

Italian Prime Minister Massimo D'Alema told other leaders in Chile for the swearing-in of President-elect Ricardo Lagos that the Europe Union could endorse Koehler at a meeting of finance ministers next Monday, Italian news agencies reported.

The reports quoted sources close to the Italian delegation as saying he had already told German Chancellor Gerhard Schroeder that Italy was determined to support a strong EU position for the post and that on Monday convergence could emerge around the candidacy of Koehler put forward by Germany.

And the United States -- which blocked Caio Koch-Weser -- remained cautious with Secretary of State Madeleine Albright saying that Washington would back a strong European candidate but making no mention of Koehler.

"The important thing is to find one that has the qualifications and the consensus," Albright told reporters after meeting European Commission President Romano Prodi in Brussels.

Reacting, Germany's Heye said Berlin expected the United States to continue to show public restraint until final agreement had been reached on a common European candidate.

As things stand, Koehler is the only declared European candidate, with acting IMF managing director Stanley Fischer of the United States and Sakakibara, a former Tokyo Finance Ministry official, still in the running, officially at least.

But Sakakibara effectively ruled himself out of contention after coming last behind Koch-Weser and Fischer in a first round of voting in the IMF executive board.

"I don't think I will get the position, but the way that the IMF managing director has been selected in the past needs to be changed," Sakakibara said at a speaking engagement in Singapore, calling for a new selection procedure.-Reuters