ECONOMY

FirstFT: Georgieva drama to overshadow IMF annual meeting

Divisions between the US and Europe over whether Kristalina Georgieva should remain in her post as the IMF chief are set to overshadow the fund’s flagship annual meetings this week as Washington wants her to go but European powers are more inclined to let her stay.

Georgieva’s position as the fund’s managing director has come under pressure since she was accused last month of manipulating data to favour China in a previous role at the World Bank. The 24 members of the IMF’s executive board are split into two camps, with the US and Japan, the fund’s two biggest shareholders, on one side, while France, Germany, Italy and the UK are more supportive, aligning with China and Russia on the issue, according to people briefed on the matter.

During two days of meetings last week, the board failed to reach a consensus. In a statement released late on Friday, the IMF said the board had advanced its “thorough, objective and timely review” of the situation, but had not yet concluded its investigation. It said it hoped to do so “very soon”.

The fund’s annual meetings with the World Bank start today.

Do you think Georgieva should maintain her position? Email your thoughts to me at [email protected]. Thanks for reading and here’s the rest of today’s news — Emily

Five more stories in the news

1. The latest on Europe’s gas crunch Vladimir Chizov, the Kremlin’s ambassador to the EU, has called on Europe to mend ties with Moscow in order to avoid future gas shortages, but insisted that Russia had nothing to do with the recent jump in prices. Chizov, however, said he expected Gazprom to respond swiftly to instructions from president Vladimir Putin to adjust output.

2. EU and UK edge closer to trade war Brussels yesterday rejected London’s demands for a comprehensive rewrite of the Brexit deal’s contentious Northern Ireland protocol, ratcheting up tensions. The European Commission reiterated that it would not agree to remove oversight of the protocol by the European Court of Justice.

3. US lost AI fight to China, says ex-Pentagon software chief In his first interview since leaving the post at the Department of Defense a week ago, Nicolas Chaillan said he resigned in protest over the slow pace of technological transformation in the US military and because he could not stand to watch China overtake America.

4. Ing-wen backs Taiwan’s military build-up President Tsai Ing-wen said that her country would strengthen its defence against China after Chinese president Xi Jinping promised a “peaceful reunification” with Taiwan, which China claims as its own. (Reuters)

5. Indian minister’s son detained after car kills protesting farmers Ashish Mishra, the 40-year-old son of junior home minister Ajay Kumar Mishra, has been arrested on suspected murder charges a week after his car rammed into a group of demonstrating farmers, killing at least four in an incident that has galvanised the country’s rural protest movement.

A burnt car that is believed to have run over and killed farmers in Lakhimpur Kheri, Uttar Pradesh. The farmers were demonstrating against the government’s agricultural reforms © AP

Coronavirus digest

  • India’s demand for luxury cars has risen in a sign of the country’s economy accelerating out of the worst of its pandemic downturn.

  • The vast majority of Americans subject to workplace vaccination mandates have complied with them, confounding predictions that such requirements would worsen labour shortages.

  • Starting today, Malaysia will allow interstate and overseas travel for the 90 per cent of its population that is fully vaccinated against Covid-19.

  • Global growth showed strong momentum earlier in 2021 but is now slowing in China and the US, according to the latest Brookings-FT tracking index. (FT, Straits Times)

Global growth momentum has stalled after a strong initial rebound from the Covid-19 recession

The day ahead

IMF and World Bank annual meeting The fund’s annual meetings with the World Bank start today amid the aforementioned turmoil whether Kristalina Georgieva should remain in her post as the IMF chief.

  • Opinion: The debate around Georgieva’s actions has huge geopolitical consequences for multilaterals, writes Edward Luce.

Nobel Prize in economics The winner will be announced in Stockholm today. Keep up with all the Nobel Prize winners here.

Pharma Europe What’s billed as the world’s largest meeting of commercial pharmaceutical industry executives will begin in Barcelona today.

What else we’re reading and listening to

What caused China’s energy crisis? Beijing’s green ambitions, policy confusion and supply disruptions have all been blamed for China’s energy crunch. The crisis has become so serious that China will allow power prices to rise by as much as 20 per cent to incentivise power production, a jump from the current 10 per cent limit.

  • Related listen: In the latest episode of Behind the Money, Charlie Penner of Engine No 1 talks about the very public proxy campaign he launched against ExxonMobil, forcing the oil major to prepare for a future free of fossil fuels.

How cows leapt to the frontline of climate change With climate change and the substantial greenhouse gas emissions from livestock coming under increasing scrutiny, many farmers and scientists are looking for affordable solutions that might make meat and dairy greener. They’re finding answers in strategies ranging from garlic-infused pellets to face masks for cows.

Cheap masks carry a high cost for US manufacturing The plight of America’s textile makers sums up the country’s complicated trade relationship with China, writes Rana Foroohar. The US is going to need to look closely at how one-cent masks get made and whether they’re really worth the price.

Merkel’s botched succession Angela Merkel will go down in history as one of Germany’s most successful chancellors, but she failed at one of the most basic jobs for a senior politician: keeping her party in power. Merkel stands accused of neglecting the CDU and losing support of party’s rightwing.

The ins and outages of social media dependence The Facebook blackout was a reminder of our reliance on social media. That’s not entirely a bad thing, writes Jo Ellison. The rise in social activism online, conjoined with new technologies, now means it’s never been easier to help salve your bleeding heart.

Travel

As we watch the climate shift before our eyes, the latest episode of the FT Weekend podcast focuses on the awesomeness of nature and how it humbles us. Travel writer Mark Stratton brings us to a live erupting volcano in La Palma, where “the lava flows like honey on a plate”.

Lava runs towards homes on the first day of the eruption, September 19
Lava runs towards homes in La Palma on the first day of the eruption on September 19 © Arturo Jimenez/Avalon

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