China Central Bank Lays It Down: "New IMF Leadership Should Reflect New World Order"
There's a funny thing about the New World Order: it eventually gets too big and bites the hand the feeds it. Enter the PBoC: "The new IMF leadership needs to reflect changes in the world economic order and be more representative of emerging market economies, Chinese central bank governor Zhou Xiaochuan said Thursday in his first public comments since the arrest of Dominique Strauss-Kahn. "The senior management team of the IMF should better reflect changes in world economic patterns and should be more representative of emerging market economies." Translation - no more European of American cronies. It is also probably safe to say that Lagarde's odds of pulling the white smoke out of the conclave bag have just plunged. It is also safe to say that with China now unofficially Europe's backstopper (and there were those wondering why China is buying all those Spanish and Portuguese bonds), what China wants, China gets.
From Market News:
Zhou also said he regretted Strauss-Kahn's decision to resign as the Managing Director of IMF.
"The current world economy is recovering slowly from the financial crisis and the European sovereign debt crisis is at a key stage. A powerful IMF support is needed to overcome current difficulties facing Europe and ensure world economic developments are on a robust, sustainable and balanced track," Zhou added.
German Chancellor Angela Merkel reiterated earlier today that the next head of the International Monetary Fund should be a European again.
And so the stage is set for the next big geopolitical theater: Germany vs China over the largely symbolic issue of who gets to scare the Sofitel maids next.