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| George Osborne's ambitions over IMF top job prompt criticism | George Osborne's ambitions over IMF top job prompt criticism |
| (32 minutes later) | |
| George Osborne’s interest in running the International Monetary Fund has met immediate criticism because of the former chancellor’s austerity policies and Brexit-related question marks over the UK’s international standing. | |
| The former chancellor has signalled to friends that he views himself as a potential candidate to replace Christine Lagarde, the current head of the Washington-based fund, who was nominated to lead the European Central Bank this week. | The former chancellor has signalled to friends that he views himself as a potential candidate to replace Christine Lagarde, the current head of the Washington-based fund, who was nominated to lead the European Central Bank this week. |
| However, his role as the architect of austerity was highlighted on Thursday as being badly out of step with the needs of the global economy, while the IMF has gradually also begun to distance itself from a fiscal approach that requires heavy cuts to public spending. | However, his role as the architect of austerity was highlighted on Thursday as being badly out of step with the needs of the global economy, while the IMF has gradually also begun to distance itself from a fiscal approach that requires heavy cuts to public spending. |
| George Osborne 'aiming for new role as head of IMF' | George Osborne 'aiming for new role as head of IMF' |
| John McDonnell, the shadow chancellor, told the Guardian that the use of austerity had hindered the UK’s recovery from the financial crisis. He said: “Before the decision is made on any IMF appointment, consideration should be made to the fact that George Osborne was the architect of the slowest recovery from a recession since Napoleonic times. | John McDonnell, the shadow chancellor, told the Guardian that the use of austerity had hindered the UK’s recovery from the financial crisis. He said: “Before the decision is made on any IMF appointment, consideration should be made to the fact that George Osborne was the architect of the slowest recovery from a recession since Napoleonic times. |
| “That’s hardly the record or qualification for someone to steer the ship of the global economy.” | “That’s hardly the record or qualification for someone to steer the ship of the global economy.” |
| The IMF, which was a prominent advocate of austerity around the time Osborne was chancellor, has since drifted away from backing budget cuts as a means to balancing the books. Academics at the fund criticised neoliberal economics in an influential report three years ago, while Lagarde has urged greater public spending to promote economic growth. | The IMF, which was a prominent advocate of austerity around the time Osborne was chancellor, has since drifted away from backing budget cuts as a means to balancing the books. Academics at the fund criticised neoliberal economics in an influential report three years ago, while Lagarde has urged greater public spending to promote economic growth. |
| Commenting on Osborne’s potential candidacy, Paul Diggle of the investment group Aberdeen Standard, said Osborne’s record of cutting government spending in a bid to achieve growth no longer dovetailed with the fund’s ethos. He said: “He is a big advocate for expansionary fiscal contraction and that is no longer in vogue at the IMF. His thinking doesn’t really chime with where the fund is at.” | Commenting on Osborne’s potential candidacy, Paul Diggle of the investment group Aberdeen Standard, said Osborne’s record of cutting government spending in a bid to achieve growth no longer dovetailed with the fund’s ethos. He said: “He is a big advocate for expansionary fiscal contraction and that is no longer in vogue at the IMF. His thinking doesn’t really chime with where the fund is at.” |
| Criticising the former chancellor, Paul Krugman, the Nobel-prize winning economist, tweeted: “Hey, why not? If Trump is nominating people who got everything wrong about monetary policy for the Fed, why not someone who insisted that austerity is expansionary for the IMF?” | Criticising the former chancellor, Paul Krugman, the Nobel-prize winning economist, tweeted: “Hey, why not? If Trump is nominating people who got everything wrong about monetary policy for the Fed, why not someone who insisted that austerity is expansionary for the IMF?” |
| Britain’s status on the world stage on the back of acrimonious talks with Brussels over Brexit could also damage the chances of a Brit securing the support of other nations to run the IMF, which promotes cooperation between countries to drive economic growth. | Britain’s status on the world stage on the back of acrimonious talks with Brussels over Brexit could also damage the chances of a Brit securing the support of other nations to run the IMF, which promotes cooperation between countries to drive economic growth. |
| Europeans have run the IMF since the second world war, in an unwritten understanding that allows for an American to lead its twin institution, the World Bank. | Europeans have run the IMF since the second world war, in an unwritten understanding that allows for an American to lead its twin institution, the World Bank. |
| Stefan Gerlach, a former deputy governor of the Central Bank of Ireland, warned that EU member states could object to the appointment of the first UK citizen to run the IMF while Brexit is taking place. | Stefan Gerlach, a former deputy governor of the Central Bank of Ireland, warned that EU member states could object to the appointment of the first UK citizen to run the IMF while Brexit is taking place. |
| “It is difficult to imagine that in these pre-Brexit days, any UK candidate would enjoy the support of the EU. The temptation to show the benefits EU members have is too strong,” he tweeted. | “It is difficult to imagine that in these pre-Brexit days, any UK candidate would enjoy the support of the EU. The temptation to show the benefits EU members have is too strong,” he tweeted. |
| Candidates to run the IMF need to be nominated, either by a member of its 24-strong executive board or by a representative of one of the 189 nations in the IMF sitting on its board of governors – usually a country’s finance minister or central bank governor. | Candidates to run the IMF need to be nominated, either by a member of its 24-strong executive board or by a representative of one of the 189 nations in the IMF sitting on its board of governors – usually a country’s finance minister or central bank governor. |
| Britain’s representative on the IMF executive board is Shona Riach, a former Home Office and Treasury official. On a par with France, the UK has 4% of voting rights in Fund decisions. The US has the most, with 16.5%, ahead of countries such as China, Japan and Germany. | |
| Philip Hammond represents the UK on the IMF board, although he is widely expected to be replaced as chancellor when the next prime minister assumes office. | Philip Hammond represents the UK on the IMF board, although he is widely expected to be replaced as chancellor when the next prime minister assumes office. |
| Osborne would likely face stiff competition from Mark Carney, the governor of the Bank of England, whom the former chancellor appointed to run Threadneedle Street back in 2013. | |
| Although Canadian by birth, Carney also holds British and Irish citizenship. He is due to leave the Bank early next year. | Although Canadian by birth, Carney also holds British and Irish citizenship. He is due to leave the Bank early next year. |
| International Monetary Fund (IMF) | International Monetary Fund (IMF) |
| George Osborne | George Osborne |
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| John McDonnell | John McDonnell |
| Austerity | Austerity |
| Economic policy | Economic policy |
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