Voice

Did the White House tell the World Bank president that he's out?

A source inside the World Bank sends along this nugget on the simmering question of whether and when the World Bank will get a new president:

Rumors are running wild that RBZ [Robert Zoellick] was told earlier this week by the White House that they would like to see him go.  RBZ has called on short notice a meeting with the Board for this morning - which is very unusual.  So people are putting two and two together.

This meshes with what the well-informed Nancy Birdsall at the Center  for Global Development wrote earlier this week:

The insider talk on the next World Bank president is heating up, with rumors that Robert Zoellick will formally initiate the process in the United States system shortly by indicating to the White House that he will step down at the end of his term in June.

Then begins the collision in the White House between its promises to the global community and political realities at home.  The collision boils down to the question of whether or not the White House will try to ensure that the longstanding U.S. privilege of picking World Bank presidents  prevails once more—arguing that the Europeans after all got their way on another European at the IMF last summer.

Formally speaking, the selection process for next Bank president will be open to all, including non-Americans. The key question is whether that process will simply be a facade behind which operates the traditional American privilege.

Update: World Bank is now confirming that Zoellick will step down at the end of his term. The Bank released a statement that includes this from Zoellick himself:

I’m honored to have led such a world class institution with so many talented and exceptional people. Together we have focused on supporting developing countries to navigate crises and adjust to global economic shifts. The Bank has recognized that we live in a world of multiple poles of growth where traditional concepts of the "Third World" are now outdated and where developing countries have a key role to play as growth drivers and responsible stakeholders. At the same time, we've scaled up our support to poor people, countries, and communities and shown that the Bank can be an indispensable innovator, catalyst, and driver of a modernized multilateralism.

I’m very pleased that when the world needed the Bank to step up, our shareholders responded  with expanded resources and support for key reforms that made us quicker, more effective and more open. The Bank is now strong, healthy and well positioned for new challenges, and so it is a natural time for me to move on and support new leadership.

More: A well-placed source is pushing back on the report from my original Bank correspondent that Zoellick was told by the White House that he had to go or was in any way pushed out. "That's 110 percent wrong, there's no grey area." This source would not offer a view as to whether the administration would have allowed Zoellick serve a second term, but insisted that the decision was his own.  

The Multilateralist

The virtues of being slow and indecisive

In this FT story, some northern European leaders are sounding downright cocky about the Eurozone's ability to weather a Greek default:

One key reason for the increasing boldness in northern Europe is a growing belief the EU can contain the blowback from a disorderly default, having built up the eurozone’s financial “firewalls” against contagion. Some officials also believe financial markets have priced in a default, meaning any adverse reaction will be limited.

Wolfgang Schäuble, the German finance minister, said on Monday the eurozone was “better prepared than two years ago” to deal with a default.

A day earlier, Philipp Roesler, the German economy minister, said such an outcome had “lost much of its horror.” Senior officials from the Netherlands and Luxembourg have made similar statements publicly in recent days.

They may be right; because of the temporizing measures of the EU and the IMF, the possibility of a Greek default has been hanging out there now for well over a year. Publics and institutions are likely as prepared as they can be. Back in April, I tried to argue that this "speed brake" function of multilateralism can be awfully important:

One of the most important--but largely unappreciated--services international organizations provide is to slow the pace of events. These institutions are often criticized for their tendency to temporize, find stop-gap solutions, and kick problems down the road. In some cases, they should be criticized for this habit; many crises demand speed and decisiveness. But often a speed brake is just what is called for...in the Greek case, the IMF and the EU probably won't solve the underlying problem of Greek debt. But they may still be successful in mitigating the impact of an eventual Greek default and ensuring that it occurs in a more controlled manner than it would have otherwise. It's not necessarily heroic stuff and the institutions probably won't get much credit for it. But it's the kind of service that helps keep crises from turning into cataclysms.