Donohoe chances of IMF top job dealt fatal blow as Germany joins France in backing incumbent

French and German finance ministers have endorsed current managing director Kristalina Georgieva

Public Expenditure Minister Paschal Donohoe had done little to kill off talk that as president of the Eurogroup of finance ministers he coveted the top job at the IMF.

The prospects of Public Expenditure Minister Paschal Donohoe securing the top job at the International Monetary Fund appear to have been dealt a fatal blow, after Germany rowed in behind France to endorse the incumbent Kristalina Georgieva for a second term.  

Mr Donohoe had done little to kill off talk that as president of the Eurogroup of finance ministers he coveted the top job at the IMF in Washington should Ms Georgieva not go for a second term as managing director. 

Bloomberg News first reported in early December his possible interest, citing unnamed people familiar with the matter as saying Mr Donohoe was considering a bid. Ms Georgieva had not publicly signalled her intentions. 

Mr Donohoe had been head of the Eurogroup since the middle of 2020. He was subsequently elected for a second two-and-half-year term and kept the job despite stepping down as finance minister in late 2022, as part the agreed coalition deal.   

German finance minister Christian Lindner said on Monday Ms Georgieva was “exactly the right person to steer” the IMF, openly acknowledging his country’s backing for a second term. 

Commenting in a X post, Mr Lindner said Ms Georgieva navigated the IMF “through difficult times over the last years”. 

“I am convinced that she is exactly the right person to steer the institution through the challenges ahead and to strengthen the IMF as an advocate for structural reforms in our economies,” he said. 

Speaking last month, French finance minister Bruno Le Maire said Ms Georgieva was doing a “great job” and his country would back her if she decided to seek another five-year term. 

The IMF has always been led by a European national, in a tacit understanding between Europe and the US, which in turn gets to nominate the president of the World Bank. 

Over the IMF’s eight decades, five of 12 managing directors have been from France. Any candidate would need then support of both Europe and the US. 

Mr Donohoe has appeared to have been on good terms with US Treasury Secretary Janet Yellen. 

In late 2021, Ms Yellen, on an unusually extended visit to Dublin, commended Ireland for signing up to the new global tax accord that set a new minimum rate of 15% that multinationals and other large corporates would have to pay in their tax bills. 

She said at a media conference alongside Mr Donohoe she had not cajoled Ireland over the new global accord that involved Ireland raising the corporation tax rate from 12.5%. She told reporters at the time she had held talks earlier that year to try to understand Ireland's position.