Running the International Monetary Fund is clearly one of the most important jobs in global finance.
The IMF played a key role in steering the world out of financial crisis, was central to the bailout of crisis-hit eurozone nations and is engaged in rescue operations from the Ukraine to Argentina.
Plainly, the next managing director, following the desertion of Christine Lagarde to the European Central Bank, should be the best person for the job.
The IMF played a key role in steering the world out of financial crisis, was central to the bail-out of crisis-hit eurozone nations and is engaged in rescue operations from Ukraine to Argentina
If the will of the G20 of the world’s most influential countries were heeded, the old carve up – which ceded the top job at the World Bank to the United States, and the equivalent at the IMF to a European – would have been replaced by an open process.
That does not seem very likely. It may be just as well given that the Trump White House – no natural admirer of multilateral institutions – would likely push for one of its own populist clones at the top.
But even if the historic settlement remains the same, the idea that stewardship of the IMF should be a Franco-German carve-up, to be decided in the same smoked-salmon filled rooms as posts within the European Union, is outrageous.
It is extraordinary that 75 years after Bretton Woods, where Britain’s most esteemed economist John Maynard Keynes played a leading role, there has never been a Anglo-Saxon managing director.
This in spite of the fact that some of the Europeans – most notably Dominique Strauss-Kahn and Spaniard Rodrigo Rato – have brought nothing but disgrace on the reputation of the institution.
If reports of Brussels thinking are to be believed, the EU nations are planning to throw their weight behind former Eurogroup boss Jeroen Dijsselbloem, who played a role in the bailout of Greece.
Given that since the euro crisis Greece has suffered a loss of 25 per cent of output that might not be an unalloyed triumph.
In the light of the Brexit stand-off between London and Brussels, the possibility of an Anglo-Saxon boss for the IMF was always an outside bet.
Few could argue with Bank of England governor Mark Carney – who has Irish, as well as his British and Canadian background – played a critical role in rebuilding the global banking system after the crash through the Financial Stability Board.
Securing the big Bretton Woods jobs has always been about brutal power. With his Irish ancestry, Carney’s best hope might be getting North Americans – seeking to avoid a eurozone stitch-up – on side.
But as admirable as the flexible, low-tax Irish economic model has proved, post-euro crisis Dublin lacks firepower to impose its will – even it wanted to.
What a shambles.
Doubtless the £3billion offer for Britain’s largest pubs group EI, formerly Enterprise Inns, by private equity outfit Stonegate, is a good price.
But we should never forget that pubs hold a special place in communities up and down the land, and being hidden from view under private ownership with a domicile which leads to the Cayman Islands may not be the best ownership.
Under its current leadership, EI has done a good job in strengthening the share price of an indebted company which was struggling and moving to a better way of operating.
It has so far converted 400 of its 4,000 tenanted pubs into more modern managed houses, more capable of offering the real, home brew ales that the hipster generation prefers.
It has been a slow burn of around 100 pubs a year, but the direction has been clear.
The promise is that under a new ownership structure, the pace of change will be increased and Stonegate has experience through running the Slug & Lettuce.
Maybe, but private equity ownership has a bad record in the UK. Poorly run and indebted enterprises coming out of private equity include the care homes group Southern Cross – which ended up in administration – Saga and the AA, where value has been hollowed out, and Debenhams, now in the hands of creditors.
The model is to load the acquisitions up with more debt and separate operating companies from valuable property, squeezing the tenants for higher rents.
Dividends are siphoned off to tax havens for unknown and unseen investors.
It would be terrific if long-holders of EI shares – which include Standard Aberdeen and M&G – would bear with the turnaround plan, and public shareholders and communities continued to benefit from transparent ownership.