labels: international monetary fund
Italy''s finance minister elected to head IMF policy panel news
04 October 2007

Mumbai: Italian economy minister and a former European Central Bank board member Tommaso Padoa-Schioppa was elected to chair the International Monetary Fund''s steering committee, keeping European influence at the global financial institution intact.

Padoa-Schioppa won a closed ballot among the 24-member International Monetary and Financial Committee (IMFC) against Canadian finance minister Jim Flaherty, diplomatic and IMF sources said.

He succeeds Britain''s Gordon Brown who left the post after 10 years in July, after becoming prime minister of UK.

Earlier reports had indicated a move among industrialised western nations to cede some of their dominance in the IMF to emerging economies by placing Indian finance minister P Chidambaram to the top policy post.

In a move indicative of growing division between large emerging nations and poorer ones that are still aid-dependent within the Group of 11 developing countries, African countries led by Nigeria switched stance, sources said.

This has closed the immediate chance for emerging economies to shake up governance of the institution and overhaul its voting power and with it a likely chance of tensions among large developing countries wanting greater say in the running of the IMF.

The vote comes amidst IMF''s search for a new role in a changing world where rising powers like China, India, Brazil and Russia want to shake up institutions like the IMF to better reflect their growing economic weight.

India''s bid for the IMFC chair had also the backing of many large developing countries, including China, Brazil and Russia. But there have been deepening divisions among the rapidly growing emerging countries and less developed ones, especially in Africa, which still rely on rich nations for aid.

The post has always been Europe''s preserve except in the 1980s when Canada briefly filled the chair.

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Italy''s finance minister elected to head IMF policy panel