G8 finance meeting overshadowed by Wolfowitz resignation
GERMANY: The worldâ€™s most powerful finance chiefs were
gathering here on the shores of the Lake Schwielowsee resort for a
two-day meeting on world economic problems and prospects.
But the pow-wow was overshadowed before it started by the resignation
of World Bank chief Paul Wolfowitz, with the search for his successor a
likely source of friction between the US and Europe.
The finance ministers from the Group of Eight â€” Britain, Canada,
France, Germany, Italy, Japan, the United States and Russia â€” were
meeting ostensibly in Potsdam to discuss ways of strengthening financial
market stability, supporting sound governance in Africa and regulating
the 1.4-trillion-dollar hedge fund industry.
But the gathering was upstaged by the announcement that World Bank
president Paul Wolfowitz â€” who had been originally scheduled to attend â€”
would step down next month over a favouritism scandal.
European countries had been calling for Wolfowitzâ€™s head in the
long-running scandal over a generous secondment package for the World
Bank chiefâ€™s girlfriend Shaha Riza.
The US had staunchly defended the 63-year-old former deputy defense
secretary, but finally gave in to fierce European pressure with the
announcement that Wolfowitz would quit on June 30.
Thus, it was highly likely that all eyes in Potsdam would now turn to
finding his successor. In Washington, the White House said that
President George W. Bush would soon announce a new candidate to allow
â€śan orderly transition.â€ť
By tradition, the United States nominates the World Bank chief while
Europe names the head of its sister institution, the International
The practice has come in for criticism from developing and emerging
countries, as they demand a greater say in the institutions to reflect
their increasing weight in the global economy.
Aid to developing countries, and to Africa in particular, will also
be on the agenda of the Potsdam talks. And delegates from countries such
as Cameroon, Ghana, Nigeria and South Africa have been invited to the
In an open letter published in the Financial Times on Friday, more
than 60 luminaries, including five Nobel prize winners urged the G8
ministers to honour their groupâ€™s promises to end poverty.
The signatories called on G8 finance ministers to â€śimplement
innovative finance mechanisms as a key source of much needed finance for
development,â€ť and said that â€śthe poorest countries in the world need you
to honour these aid pledgesâ€ť if they are to end poverty.