IMF voting shares and the managing director choice

The choice of IMF head has not been made but signs are pointing to the Christine Lagarde, the French Finance Minister is the leading candidate. She will likely get the job, but the real question is whether she deserves the job given the changes in economic power. The number one issue for the IMF is the Greece problem and the other sovereign risk in the EU. The EU needs to have a IMF director who is European-focused. Someone who understands their special needs. Certainly that was the case after WWII when the focus of the IMF was on the rebuilding of Europe. This issue is whether have a European focus makes sense today. The IMF will not be unbiased if the another European is the head. If voting shares were distributed by GDP, a European would not be the managing director

The EU represents only 20% of global output on a PPP basis. Places like China and India are way under-represented with voting shares. There have been voting share reforms but there is a huge difference between share of GDP and votes. The fastest growing region for receiving credit is western Europe. It does not make sense that the disproportionate voting also receives good terms for bail-outs. The sovereign risk of the EU has to be addressed fairly and that may mean stricter terms for credit.