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Germany faces further resistance on IMF job

BERLIN: Chancellor Gerhard Schroeder's second attempt to install a German as head of the International Monetary Fund seemed in danger of unravelling on Wednesday as the United States and other key nations withheld their support.

The White House declined to endorse Horst Koehler, the head of the European Bank for Reconstruction and Development (EBRD), saying it believed there could be other European candidates.

Italian Foreign Minister Lamberto Dini, whose country also has potential nominees to lead the global lender, said Koehler lacked the desired authority -- although he was "a bit stronger" than Berlin's ill-fated initial choice, Caio Koch-Weser.

"It still does not fulfil the levels of authority that had been hoped," Dini told Reuters.

Schroeder's spokesman Uwe-Karsten Heye said the chancellor had informed U.S. President Bill Clinton about the nomination of Koehler and had found "positive interest".

But U.S. officials were determinedly non-committal after blocking Koch-Weser, a deputy finance minister, who withdrew on Tuesday saying he felt "humiliated" by the transatlantic row.

"I'm not going to discuss any individual candidate," Clinton spokesman Joe Lockhart said. "I understand the Europeans have a number of candidates that they are looking at."

Italian government sources said they expected a common EU position to emerge soon, without commenting on whether Koehler would win the bloc's backing.

"There is a European position that will emerge in the coming hours on the candidacy to lead the IMF," one source said. "Italy will take part in this position. Contacts are under way".

Taken with Dini's earlier comment, it was not clear whether Rome was preparing the ground for an alternative to Koehler. Two Italians, Treasury Minister Giuliano Amato and top treasury official Mario Draghi, have been floated as possible runners.

Earlier, a spokesman for British Prime Minister Tony Blair said Europe had not come together behind Koehler, a former deputy finance minister and once a close aide to Schroeder's conservative rival and predecessor Helmut Kohl.

"We want a European candidate and one who will carry real clout and weight around the world," he said.

Schroeder, who has taken an unusually high profile in lobbying for a German, did get support from Paris, which had undermined Koch-Weser by withholding French support for months.

Portugal, which holds the European Union's rotating presidency, has backed Koehler.

HISTORY REPEATING ITSELF?

Germany's conservative opposition Christian Democrats predicted Schroeder's "heavy-handed" diplomacy could cause another embarrassing defeat after the Koch-Weser debacle.

"The man doesn't understand a thing about how to put forward a candidate. He's been acting like a Rambo," said CDU general secretary Angela Merkel, whose party is revelling in a chance to score points after months embroiled in a financial scandal.

Germany, the world's third largest economy, kept a low international profile for decades in the wake of World War Two. Schroeder, who took office in 1998, has sought to overcome that past stigma and staked Berlin's claim to international posts.

The CDU's parliamentary floor leader said Schroeder was repeating his earlier mistakes in nominating Koehler.

"It's bad what's happening now, with the process apparently repeating itself with a second candidate, Koehler," Friedrich Merz said. "It appears it has not been properly prepared."

A U.S. official said Germany had contacted its allies before announcing Koehler on Tuesday but said his candidacy may have been announced somewhat hurriedly because of press leaks.

In an editorial, Germany's best-selling newspaper Bild said those who ignored the United States' global pre-eminence were bound to flounder: "Those who forget this end up looking stupid, as Herr Schroeder does now."-Reuters