IMF voting system, help for Germany's candidate

By Douglas Busvine

BERLIN (Reuters): The International Monetary Fund (IMF)'s voting system should help Germany's Caio Koch-Weser to become its new managing director despite the arrival overnight of two non- European candidates, his backers said on Thursday.

The race to succeed Frenchman Michel Camdessus for the high profile job was thrown open on Wednesday when acting IMF boss Stanley Fischer, a naturalized American, and former Japanese finance minister official Eisuke Sakakibara were nominated.

But Koch-Weser's backers say their man still has a strong chance of winning the job, which has traditionally been held by a European.

The quiet confidence in Berlin rests on the knowledge that the IMF's voting system favors the European countries which -- however reluctantly -- have lined up behind the German deputy finance minister's bid.

The new chief of the global lender will be elected by the IMF's 24-member Executive Board, where several large countries like the United States, Japan and Germany can cast votes in their own right, reflecting their economic power.

Things get interesting when it comes to the so-called "constituencies" of countries which are represented by a single board member. European countries have the majority stake in several groups and Germany hopes Koch-Weser can capitalize.

"We are certain that we will win the votes of many blocs," one German government source told Reuters, speaking on condition of anonymity.

Germany is confident that Koch-Weser, 55, will secure the full backing of European Union finance ministers at a meeting next Monday. "There is no alternative candidate in Europe to Koch- Weser," a Finance Ministry spokeswoman said.

The succession at the IMF could then be discussed as early as Tuesday in Washington with a possible three-way vote on Wednesday or Thursday.

With Washington skeptical about Koch-Weser, the United States could abstain or cast its 17.35 percent share of votes in favor of Fischer, who was nominated by an African bloc and enjoys support from emerging market countries.

Fischer, who was Camdessus's deputy before taking charge on a caretaker basis, is a naturalized American who was born in Zambia. He is widely believed to enjoy tacit U.S. support.

Sakakibara could win backing from some Asian groups and Russia. But the man dubbed "Mr Yen" for his influence on currency markets is the weakest of the threesome and would probably fall at the first hurdle.

Koch-Weser, meanwhile, may not win an outright majority in the first round, but in a best-case scenario could come first with a score of at least 40 percent.

That total would include Germany (6.08 percent), France and Britain (both with 5.02 percent) and blocs led by Belgium (5.21 percent), the Netherlands (4.92 percent), Italy (4.23 percent), Denmark (3.56 percent), Switzerland (2.66 percent).

China, with 2.2 percent, has also declared for Germany, and Francophone Africa (1.17 percent) could also follow the lead set by France.

Crucial to boosting Koch-Weser's share of the vote would be for Spain to overcome Mexican resistance in its group (which has 4.34 percent) after clashes over debt dating back to Koch-Weser's time as a World Bank executive.

Although Koch-Weser was born and raised in Brazil of German expatriate stock, speaks fluent Portuguese and holds dual nationality, it is not clear whether he can count on the support of South America's largest economy, sources say.

Germany also hopes that smaller groups keen to contain the global influence of the United States will side with Koch-Weser.

U.S. Treasury Secretary Lawrence Summers has made little effort to disguise his poor opinion of Koch-Weser, but Washington has also made clear it would drop its objections to a candidate who wins comprehensive European backing.