Journal Issue

Köhler resigns post as IMF’s Managing Director to accept nomination for German presidency

International Monetary Fund. External Relations Dept.
Published Date:
March 2004
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IMF Managing Director resigns

On March 4, Horst Köhler announced that he had accepted a nomination for the presidency of the Federal Republic of Germany and, effective immediately and in accordance with IMF rules, tha he had tendered his resignation as head of the IMF. Köhler, who is 61 and had served nearly four years of his five-year term as the IMF’s Managing Director, indicated that he was accepting the nomination with “a laughing and a crying eye”—honored by his nomination and yet finding it hard to leave an institution that he had fully expected to continue to serve and for which he had great and continuing regard.

Köhler told reporters that he had not sought the office of the presidency nor did he see it as an appointment that could “be planned in advance.” But he expressed confidence that his own mix of national experience—as president of the German Savings Bank Association and as deputy minister of finance—and international experience—at the European Bank for Reconstruction and Development as well as at the IMF—left him well positioned to “contribute to what Germany needs right now”—namely, help in readjusting its role in Europe and in the world, creating a strong economy, and developing “a good understanding of the Germans in the world and of the world in Germany.”

Köhler said that he was leaving the organization with the “deepest appreciation of its integrity and its dedication to helping its members.” Asked by reporters to reflect on his biggest achievement in office, he indicated that while any response just now would be “a bit premature,” he was proud that during his tenure the IMF had opened up further—listening to others, developing a “learning culture,” and drawing lessons from experience. He also cited the IMF’s crisis prevention and management roles, which, in recent years, have helped the global economy recover from a major deterioration.

Köhler, who very recently returned from a two-day trip to Brazil, was also asked about his discussions with President Luiz Inácio Lula da Silva. The substance of those talks, he suggested, will not be affected by the selection of a new managing director. Referring to leaders in the region like President Lula da Silva, he said that they don’t need to be lectured about what is right for their people. What they need is “appropriate support at the appropriate time,” adding that he favored a rethinking of the instruments that the IMF employs to prevent crises. In his view, the international community should provide “timely and proactive support and help” to countries that have “the right intentions, the right policy in place,” but suffer international financial and economic setbacks that are not under their control.

In his parting comments to reporters, Köhler also called upon the international community to be “more creative” and to search for “more financing room for infrastructure investment.” While growth is not everything, he said, “without growth you end nowhere” Sustained growth requires sustained development based on investment in infrastructure.

And finally, asked to speculate on his successor, Köhler demurred. The decision on a new managing director, he said, “should be discussed within the Executive Board of the IMF and with the shareholders of this institution”

The full text of IMF Press Release No. 04/43 on Köhler’s resignation and the transcript of his press conference are available on the IMF’s website (

Role and selection of IMF Managing Director

The Managing Director is the IMF’s chief executive officer, serving as head of the institution’s approximately 2,700 staff, and as chair of the 24-member Executive Board, which conducts the IMF’s day-to-day business.

The procedures for selecting a Managing Director are set out in the IMF’s Articles of Agreement (its charter). Article XII, Section 4, states simply that “the Executive Board shall select a Managing Director who shall not be a Governor or an Executive Director.” This leaves considerable discretion to the Executive Board on how to carry out the actual selection with an important objective being selection by consensus. When Horst Köhler was appointed as Managing Director in March 2000, the dean (the longest serving member) of the Executive Board conducted informal straw polls to gauge support among member states for the different candidates (besides Köhler, two other candidates had been formally nominated). Executive Directors elected by constituencies of countries were not allowed to split their vote, and therefore had to reach an internal consensus within their own constituencies before casting their votes.

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