Steinitz backs Stanley Fischer’s candidacy for IMF chief

Finance minister supports bid of current BoI governor; says Fischer's candidacy "is a mark of honor for the State of Israel and for its economy."

By NADAV SHEMER, REUTERS
June 13, 2011 04:09
3 minute read.
Yuval Steinitz and Stanley Fischer

Steinitz and Stanley Fischer 311. (photo credit: Courtesy)

Israel supports Prof. Stanley Fischer’s candidacy for the role of International Monetary Fund managing director, Finance Minister Yuval Steinitz said on Saturday night, in a statement made shortly after the Bank of Israel chief announced he had submitted his nomination.

“On the one hand, we would be happy to see Stanley Fischer continue in his important role as Bank of Israel governor. But on the other hand, there is no doubt that the very fact of his candidacy for this prestigious position is a mark of honor for the State of Israel and for its economy,” Steinitz said.

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“The role of IMF chairman fits Professor Fischer like a glove – both from an education perspective and from the perspective of the experience he gathered at the IMF, World Bank, and in the past six years in which he has become an asset for the Israeli economy as central bank governor.”

Fischer said in a press release on Saturday that it was because of his experience from 1994-2001 as the IMF’s first deputy managing director before moving to Israel that he decided to apply for the top job, in the belief that he “will be able to contribute to the International Monetary Fund, a central player in the global economy, and contribute to the global economy in the post-crisis period.”

He added, “A little over six years ago I immigrated to Israel, and I consider myself very lucky to have had the opportunity to live in the country, and even more than that – the opportunity to attempt to contribute to it. This feeling has only intensified since I moved to Israel. I recently began my seventh year as governor of the Bank of Israel.

“One of the primary challenges that I set for myself during my first term was passing the new Bank of Israel Law, with the goal of turning the bank into a more transparent and modern institution, in line with international standards. I decided to continue for a second term in order to implement the Bank of Israel Law and to continue and contribute to the Israeli economy.

“However, an extraordinary and unplanned opportunity has come up, possibly one that will not come again, to be a candidate for the head of the IMF. After much deliberation, I have decided I want to pursue the opportunity. This is despite the process being complicated and despite the possible barriers.”

Steinitz warned on Sunday that Fischer probably would not get the IMF job, telling Army Radio: “The chances are not great, there are obstacles along the road... First, there is the age obstacle. [Second], the choice is very much political.

Were it purely professional one would be hard pressed to find a better person than Fischer.”

Fischer, 67, is considered a serious challenger to French Finance Minister Christine Lagarde for the post, but the IMF would have to change its rules that no one be appointed to the post above the age of 65 nor hold the post beyond the age of 70.

Although born in northern Rhodesia (now Zambia), the fact of Fischer’s Israeli citizenship could pose a problem for Arab countries. He is also a US citizen, which could prove an obstacle as the United States traditionally claims the top job at the World Bank, while a European has always run the IMF.

Lagarde said at a press conference in Cairo on Sunday that several Mideast nations have expressed support for her bid, although Egyptian Finance Minister Samir Radwan said after meeting with Lagarde that Fischer “knows the IMF” and “has the right” to seek its leadership. Radwan added that Egypt is still deciding whom to support for the job, and that “for us, we judge on the basis of merit.”

The only other declared candidate apart from Fischer and Lagarde is Mexican central bank chief Agustin Carstens.

A Reuters poll of economists around the world in May found 32 of 56 saw Lagarde as the favorite, although Fischer won the most votes as “best suited” for the position.

Fischer, who just started his second year of a second five-year term as Bank of Israel chief, is widely credited with helping the economy weather the global financial crisis by starting to lower Israeli interest rates sharply in 2008. He has since raised rates 10 times to contain inflation.

The role of IMF chief became available after the resignation of Frenchman Dominique Strauss-Kahn, who resigned after his arrest in New York on May 14 for allegedly trying to rape a hotel maid.


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