EU-DIGEST

World Bank warns of deeper global contraction - by Lisa Twaronie

The World Bank predicted today Monday June 22 that the global economy will shrink 2.9% this year, a deeper fall than the 1.7% contraction it predicted in March. It also warned that international capital to developing nations will continue to slow, with flows projected to fall to $363 billion in 2009 from their peak of $1.2 trillion in 2007. Developing countries will grow by 1.2% in 2009, the bank said, down from 5.9% in 2008 and 8.1% in 2007. Excluding China and India, gross domestic product in developing countries is expected to contract 1.6%. The world has entered an era of slower growth that will require tighter and more effective oversight of the financial system, the bank said in a statement.

Labels: Forecast, World Bank, World Economy

Netherlands will not give up IMF and World Bank seats

The Netherlands is not prepared to give up its permament seats on the boards of the International Monetary Fund (IMF) and the World Bank. The US secretary of the treasury, Timothy Geithner, has said he wants to reduce the number of seats from 24 to 20, which would bring it in line with the G20, the group of the twenty largest economies which has lately been gaining importance over the G7. Emerging economies and developing countries want a bigger voice in the IMF and the World Bank in order to reflect the changes in the world economy. Geithner has also proposed giving emerging nations more voting shares.

Dutch development minister Bert Koenders suggested over the weekend giving equal voting power shares to countries who pay for development aid and those who receive the aid from the World Bank. But he said there could be no question of the Netherlands giving up its board seats. The Netherlands is an important donor country, Koenders said, and it also represents the interests of several other countries, including Moldavia and Israel, at the World Bank and the IMF.

Deputy finance minister Jan Kees de Jager said he doesn't see the point of the discussion. "We are a relevant country if you look at our economic weight, our exports and direct foreign investments and the size of our financial sector," he said.

Labels: Economy, EU, IMF, Netherlands, World Bank

Robert Zoellick - a diplomat to replace a hawk

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Washington Veteran Gets Nod for World Bank Post

The Bush administration - bruised by the fallout after the former Pentagon deputy was forced to step down after granting pay rises to his girlfriend - has turned to Robert Zoellick, an experienced Washington insider who served as Condoleezza Rice's number two at the state department and played a key role in the reunification of Germany in 1990. Sources within the World Bank said the announcement follows careful negotiations by the US Treasury secretary, Hank Paulson, with major governments, including Britain and Germany, in which Mr Zoellick's name was mentioned as the top choice. "It certainly could be worse. He's a solid appointment - he's not a former architect of the Iraq war," said Ken Rogoff, a former chief economist for the International Monetary Fund and a professor at Harvard University.

The US has selected the head of the World Bank since the institution was founded 60 years ago, while European governments have chosen the head of its sister organization, the IMF. Nancy Birdsall, president of the Center for Global Development, while praising Mr Zoellick's analytical skills and experience, said: "The question is whether other countries will be satisfied that he is indeed the best candidate, for example, whether he has the right management skills."

Labels: Robert Zoellick, World Bank

World Bank: Bush wants US citizen for World Bank; Blair out of the race?

President George W. Bush said this week he wants a United States citizen to succeed Paul Wolfowitz as president of the World Bank, playing down speculation he might turn to departing British Prime Minister Tony Blair for the job.“We’d very much like it to be an American” Bush said in an interview. He said Treasury Secretary Henry Paulson is in charge of the search for Wolfowitz’s successor and will take to Bush a list of those he thinks would be good for the job. Asked if his close ally Blair might be a candidate, Bush said: “I haven’t talked to Tony Blair about it, but I do think it’d be good to have a US citizen run the bank.”

Labels: George Bush, Tony Blair, World Bank

Wolfowitz hanging on by his nails: A View From the Other Side of the Atlantic - by Michael Goldfarb

From this side of the Atlantic it is abundantly clear. Six years into the most disastrous presidency in modern American history, the political class in Washington - first through fourth estates - still don't get it. They can no longer operate imperiously in a vacuum sealed tight by America's unrivaled power.

Their wish is no longer the world's command. The Wolfowitz saga proves as much. Don't be fooled by the well-orchestrated fight-back that has played out on the opinion pages of the big American newspapers over the last month and this week on the BBC's airwaves. The "Save Wolfie So He Can Save the World" campaign is organized by an odd combination of the usual right-wing sources and people who should know better. The right-wing sources say the pressure on Wolfowitz is a dastardly plot by those weak-kneed Europeans who have never forgiven Wolfie for his role in planning the Iraq War. The people who should know better, like former Atlanta mayor Andrew Young, pay homage to the caring Wolfowitz they have come to know in the field.

But no matter what the apologists say, the hot-air inflating the scandal and the pressure for Wolfowitz to resign are not about payback for Iraq. It is about something they - the Washington crowd - just don't get. You can't preach anti-corruption and be seen not to practice what you preach.

Labels: Corruption, Wolfowitz, World Bank

Tony Blair new President World Bank?

World Bank president Paul Wolfowitz may finally be removed from his job over the way he handled a salary increase involving his girlfriend, once a Bank employee. Since the bank's top job normally goes to an American, some European nations are expected to argue quietly that in exchange for Mr. Wolfowitz leaving, President George Bush be offered a compromise: The presidency could go to a non-American for the first time, but one he probably could live with -- departing British Prime Minister Tony Blair.

Adrian Wooldridge, the Washington bureau chief of the Economist magazine, says he has heard a lot of rumors about Mr. Blair's interest in the job and his departure as prime minister in late June would make the timing for a transfer just about perfect.

Mr. Blair is scheduled to arrive in Washington this Wednesday for talks with Mr. Bush. If the World Bank's governing board comes out with an expression of no confidence in Mr. Wolfowitz, the World Bank post could become a subject on the agenda of the Iraq duo?

Labels: Tony Blair, World Bank

Europe says Sayonara Mr. Wolfowitz: Deal Is Offered for Chief’s Exit at World Bank - by Steven R.Weisman

Leading governments of Europe, mounting a new campaign to push Paul D. Wolfowitz from his job as World Bank president, signaled Monday that they were willing to let the United States choose the bank’s next chief, but only if Mr. Wolfowitz stepped down soon, European officials said.

“What I’m hearing from colleagues is, ‘Let’s not push the Americans too hard,’ ” said a senior European official involved in policy on the bank. “We want to avoid a split between the United States and its European allies. We’re willing to say: ‘O.K., you find a capable American to run this institution and we can live with that.’ ”

Labels: Europe, Wolfowitz, World Bank

World Bank - More Con Than Neo - by Maureen Dowd

"This chilly April, we were forced to contemplate the batrachian grapplings of Paul Wolfowitz, the man who cherry-picked intelligence to sell us a war with Iraq. You will not be surprised to learn, gentle readers, that Wolfie in love is no less deceptive and bumbling than Wolfie at war. Proving he is more con than neo, he confessed that he had not been candid with his staff at the World Bank. While he was acting holier than thou, demanding incorruptibility from poor countries desperate for loans, he was enriching his girlfriend with tax-free ducats."

Labels: Wolfowitz, World Bank

Venezuela to quit IMF, World Bank

Venezuelan President Hugo Chavez announced on Monday that his country had decided to withdraw from the International Monetary Fund (IMF) and the World Bank. Chavez made the announcement at an event to celebrate workers' rights.

"I want to formalize our exit from the World Bank and the IMF," Chavez said, adding that "We will no longer have to go to Washington, neither to the IMF nor the World Bank, not to anyone."

Labels: Venezuela, World Bank

To Be Taken Seriously, Wolfowitz Has to Go

Should Paul Wolfowitz leave the World Bank? The answer to that question is yes. Will Wolfowitz leave? The answer to that question is murkier. The United States gave Wolfowitz the job and it will decide whether he will stay. U.S. President George W. Bush will hate to abandon a loyal henchman. He should do so, nonetheless.

Loyalty is indeed a virtue. But loyalty is not the overriding virtue. The United States needs to perceive its true interests in having an effective and credible bank. It needs also to preserve its own credibility as a campaigner for good governance. Wolfowitz now needs to go if the aim of his presidency at the World Bank is to survive. The choice is as simple and stark as that.

Labels: Integrety, USA, Wolfowitz, World Bank

Wolfowitz plans to weather storm at World Bank - by Greg Robb

Paul Wolfowitz, the president of the World Bank, said Sunday he intends to remain at the helm of the bank despite the recent storm over his handling of a female friend's promotion and salary.
"I believe in the mission of this organization and I believe I can carry it out," Wolfowitz told a press conference Sunday, where he was asked repeatedly if he had the credibility necessary to run the bank.

In an extraordinary scene at World Bank headquarters on Thursday, World Bank staffers heckled Wolfowitz by shouting "resign" as he attempted to apologize for his handling of the issue.

Labels: Bush, Credibility, USA, Wolfowitz, World Bank

Bloomberg.com: Worldwide

Wolfowitz bites the dust: Weakened, as U.K., Germany Decline to Offer Support - by Simon Kennedy and William McQuillen

World Bank President Paul Wolfowitz's hold on his job weakened as the U.K. and Germany declined to join the U.S. in backing him. Wolfowitz has ``damaged the bank,'' Hilary Benn, the U.K. development secretary, said today. His German counterpart, Heidemarie Wieczorek-Zeul, said he must ``decide for himself whether he can continue to fulfill his duties credibly.''

Nancy Birdsall, who runs the Washington-based Center for Global Development and is a former director of policy research at the bank, said on her Web log that Wolfowitz should quit because he ``has become a distraction not a leader at a moment when leadership is sorely needed.''

Labels: US, Wolfowitz, World Bank