Germany’s retail sales over the course of August have fallen sharply, mainly as a result of poor weather conditions and a trend towards saving more money, according to official figures released today.

In figures released by Germany’s Bundesbank, retail sales had fallen over the course of August by around 1.4% from July, reflecting a decline of 2.2% on the year as a result of poor weather conditions in the month and the wider bleak global outlook encouraging consumers to save, rather than spend, their money.

Whilst Germany has traditionally been seen as a low-consumption nation, and something of an economic sloth in recent years, it is thought that the particular economic threats posed by tight credit environments and global financial unrest have driven even more consumers to save rather than spend on the high street.

When factoring cars and fuel into the equation, overall sales were shown to have dropped by just 0.1% over the month as a result of weak clothing and household good sales, whereas the fall on the year was much more significant, at 3.2% through August.

It has been suggested that high oil and fuel prices, combined with growing prices for wheat and meats reared on wheat based feeds have had a significant impact on German consumers, particularly in relation to non-essential spending and luxury items.

Additionally a recent spate of prolonged bad weather is thought to have had an extensive impact on retail sales, as consumers were forced to stay indoors rather than brave the elements. It is predicted that as a result, figures will perk up in line with improving weather conditions.

The strong improvements on the German employment front have as of yet to make themselves felt in terms of consumer confidence and spending, which could also see impressive figures next time around.

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The German rate of unemployment has fallen to its lowest level in over fourteen years off the back of ongoing economic growth in spite of adverse global externalities, according to official figures released today.

In figures released by the Federal Labour Agency today, unemployment in the German economy was shown to have fallen by around 8.8%, a real decline of 50,000 to just under 3.7 million for the month of September. The fall sees unemployment within the Germany economy fall to its lowest rate since early summer 1993.

The fall in unemployment was larger than many analysts had previously expected, which should eventually help to boost German consumer confidence and spending on the high street.

The growth in employment figures has been welcomed by German investors, and it has been attributed to strong demand within Germany and abroad. However, the ongoing strength of the euro could eventually have a negative effect on trade exports outwith the eurozone region, as exports become more expensive.

Many have received the figures as signs of a wider recovery in the German economy, which has seen weak growth and widespread unemployment over the last few years compounding the misfortunes of the underlying European economy.

The perceived turnaround in Europe’s largest economy will also be good news for the eurozone economy, given the extent of impact German performance has on that of the regional economy as a whole. With the fortunes of the German economy apparently on the up, and French growth also on the agenda, this could spell further growth for the Eurozone economy over the coming year.

The news has been well received on the DAX through early afternoon trading, with investors buoyant in response to the promise of a more stable labour market and recovery of the German economy. The DAX was up by 44.43 points by the middle of the afternoon, trading at 7848.6 with a few hours remaining.

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German consumer confidence has fallen amidst growing fears of the fallout from the worldwide credit crisis and rising food and drink prices within the economy, according to a survey published today by analysts GfK.

In the survey released by GfK, higher food and drink prices along with unrest as a result of the global credit crisis were shown to be likely to have an impact on German consumer confidence over the short term into the month of October, which could be an early warning of weaker consumer spending in months to come.

The GfK group consumer sentiment index, looking forward to October in its predictions, reflected a decline from 7.4 points to 6.8 points, highlighting a perceived downturn in consumer confidence over the period as a direct consequence of global economic unrest and higher food prices within the German economy.

The rising cost of wheat worldwide has been held responsible for price inflation amongst dairy products and meat, as an essential component in animal feeds and many foodstuffs, which is thought to have had a drastic impact on consumer outlook for the near future.

The index also reflected a German consumer worry as to the continuation of high oil prices, which is likely to continue to be a problem for the manufacturing industry and resulting in higher energy costs for business and consumer users.

The German economy has been relatively unsettled in the wake of the sub-prime crisis, which has hit investors hard. With stock markets experiencing turbulent trading for a number of weeks, analysts had hoped that the recent Federal Reserve interest rate cuts would spur consumer confidence for the near future.

Analysts have considered the figures ‘disappointing’, particularly given positive news from neighbouring France earlier on in the week. However, many are optimistic that the news will not signify a wider downturn in the German economy.

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Consumer spending in France has risen beyond analyst expectations over the last two months fuelling speculation that inflation could soon become a significant problem, according to official figures released today.

In figures released by statistics office INSEE, French consumer spending over July and August was around 1%, vastly exceeding earlier analyst expectations of 0.2% and 0.3% respectively for the same period.

The figures, when aggregated with growth of 1.6% over the month of June highlight the best summer for French consumer growth in over ten years, which many are suggesting to be a direct result of ongoing economic reform in the country led by President Sarkozy.

With a traditionally weak exporting sector compounded by a very strong central currency, the French economy has become more and more reliant on domestic spending in recent years, which looks now to be enjoying something of a revival at decade high levels.

The figures released by INSEE today reflected a particular growth in car sales over the last two months, whilst household goods and equipment also experienced growth of around 3.7% on an aggregated basis over the last couple of months.

The news comes just a few weeks after the Bank of France publicly suggested that the French economy would surpass European Commission forecasts, reflecting something of an economic revolution in the traditionally sluggish central European economy.

With economic reform high on the agenda, French authorities are continuing to work to stimulate economic growth in spite of restrictive Eurozone growth policy at present which have seen countries across the thirteen nation Eurozone experiencing sluggish economic growth in the face of inflationary pressures

Whilst this has resulted in some political pressures within France as of late, many analysts are welcoming the steps as a move towards a more significant economic recovery.

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The president of the European Central Bank Jean Claude Trichet has criticised the French population for spending excessively in comparison to its gross domestic product, seeing them top the table as Europe’s prime ‘big spenders’.

In a statement made today, Trichet suggested that the French economy could be facing significant financial problems as it continues to outspend against its Eurozone neighbours, which has seen the French national deficit skyrocket, to the criticism of European authorities and neighbouring economies.

The news came off the back of Prime Minister Fillon’s warning that the French national finances were critical, a subject that has caused a great deal of unrest and political pressure from the European Union and neighbouring Member States within the thirteen nation Eurozone.

In retaliation, the French authorities have hit out at the European Central Bank, blaming them for the strong euro and slow growth, which is hitting the French economy hard. However, budget figures released earlier last week revealed that the French public finances were in a much worse state than had previously been expected, fuelling fears that the public coffers could soon be running dry.

President Sarkozy, elected on an agenda for widespread economic reform, has pledged to wholly eradicate the French budget by 2012 at the latest, by cutting taxes, slimming the bulging public sector and encouraging economic growth in France independently from Eurozone policy.

However, attempts to ring in economic change have thus far met stiff competition from decades of set attitudes. Whilst the French economy is seeing some progress, the state of public finances according to last week’s reports still suggests there is some way to go before France can truly relax amongst its European counterparts.

The French economy is currently suffering from growing unemployment and sluggish economic growth, as a result of engrained attitudes surviving within the French economy.

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The rising strength of the euro could ultimately lead to job cuts, after Airbus today said it was contemplating laying off a proportion of its staff if prices remain strong over the near future.

The company’s Chief Operating Officer was quoted as saying today that it would need an additional one billion euros in order to fund an employee savings fund, which was set up at the base rate of $1.35 a euro several years ago.

He further added that Airbus would be forced to move more of its purchasing trade outwith the EU to the US in order to benefit from the weakened dollar, which it hopes will help reclaim some of the deficit in the short term.

The euro was today trading at an all time high against the dollar, well through the landmark $1.40 up to $1.4120, which has made sales from within Europe more expensive, and fixed rate savings plans more unmanageable for companies like Airbus.

The company has announced that should the euro up to around the $1.45 mark it will be unable to sustain its operation at present, and its savings plan would be simply untenable over its current staff base.

Many market analysts have criticised the strenght of the euro for its negative impact on economic growth, which has been fairly stagnant over the thirteen nation eurozone over the course of this year.

It is feared that a consistently strong euro will hurt new startup businesses looking to trade outwith the EU, which could lead to many new and existing jobs facing the axe before too long.

With the European economy already suffering from a slowdown through taking the brunt of the sub-prime US crisis, analysts are fearing that the continuing high price of the euro could do more to harm the economy in the medium term.

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The French public sector is to undergo a drastic slim down on the impetus of new president Sarkozy, which could see up to 22,000 employees lose their jobs over the next few years.

President Nicolas Sarkozy spoke today on his desire for reform of the presently overcrowded public sector, which he describes as a drain on the economy at present. The move comes as part of a wider agenda for economic reform which saw Sarkozy elected to his tenure in the most recent presidential elections.

Just a day earlier, Sarkozy caused controversy by looking to modify existing pension rights of around half a million public sector staff, which has caused public sector unions to threaten wide ranging industrial action later on in the month in disagreement with the proposals.

Sarkozy spoke of making the inflated French public sector more efficient by failing to renew positions of those staff retiring over the course of the year in a bid to slim down what he described as the ‘bulging’ public sector.

He has announced that his goal is to ensure no wastage within the public sector, which means in the short term that over one in three retiring staff this year will not be succeeded in their positions as the public service wage bill is put under more close scrutiny.

However, many within the public sector have claimed that the cuts will lead to understaffing, and shortages which could lead to further delays in navigating the public services of the French government.

Despite this, many analysts within the government and further afield have suggested that the French public sector has been significantly more lax than many of its other European counterparts, in support of the clampdown initiated by Mr. Sarkozy.

Additionally, the moves have incensed trade unions, which has prompted fears of repeats of the 1995 riots and civil unrest following widespread industrial action.

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The European Union has embraced proposals to reform energy markets throughout Europe, in a move designed to improve competition amongst providers for the benefit of consumer and business energy buyers.

The European Commission has today given the green light to measures which would require energy suppliers to avoid running their respective infrastructural markets, that is to say those major corporations controlling distribution channels as well as supply will no longer be able to do so within the EU.

The measures will requires those currently in monopolised infrastructural positions to either sell their infrastructure or lease it out to be controlled by other companies in order to continue to trade within Europe, hitting some of the region’s current major suppliers when they come into force.

The strict measures are designed to offer internal protection to EU energy suppliers, whilst creating a more level playing field for companies within the EU in the energy industries by eliminating the possibility of monopolising distribution networks and service sectors.

The move in particular will impact Russian giant Gazprom, which currently supplies around one quarter of European supplies from outwith the eurozone. In order to remain trading within the eurozone, Gazprom would be required by the new laws to disintegrate its pipeline network to comply.

At present, the European Commission suggests that the market structure is too accommodating of larger enterprises, which sap competition and leave many EU residents and businesses with no real choice in selecting energy providers. The new proposals are designed to create a more competitive marketplace for the benefit of end consumers throughout the Eurozone.

Market analysts are predicting that certain of the large central European providers like EON will be particularly affected by the measures, whilst it should also eventually result in a more free flow of gas and electricity throughout the eurozone region.

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Shares in banks and lenders across Europe have suffered heavily over morning trade, as a result of the ongoing sub-prime crisis and the condition of UK lender Northern Rock.

The impact of the perceived spreading sub-prime crisis has led to investors selling shares in banks across most major European countries over the course of the morning, for fear that the problems could continue to get worse before they get any better.

Northern Rock announced today that several Spanish banks had also been required to seek emergency funding from the European Central Bank highlighting the wider nature of the problem, although it refused to disclose any details, and the ECB strongly denies the claim.

Additionally, banks across Italy and France suffered through the mornings trade as investors continued to offload shares in those with potential sub-prime exposure for fear of further liquidity problems in finance sectors.

Northern Rock shares again plummeted, down by almost 40% on the day to noon after heavier losses towards the end of last week. With the bank announcing it needed emergency cash on Friday, investors have been quick to get rid of any shares they may own in the bank to avoid suffering losses as a result.

In Spain, Bankinter had lost 6.2% by midday, whilst BNP Paribas was down on the CAC by around 3.7%. Societe Generale also lost under 3% of its share value by the early afternoon in Paris.

On the German DAX exchange, shares in Deutsche Bank, which had previously taken $500million in extra cash, fell by around 2.1% over the first half of trading, which by anyone’s standards is beyond regular trading.

Analysts are predicting that should banks continue to trade negatively throughout the course of the day, markets across Europe and potentially the US later on could be significantly hit.

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The euro has risen to its highest point in over a year against the pound amidst market reassurance that the euro is resilient enough to cope with current uncertainty.

The euro was up as far as £0.6865 yesterday off the back of negative news from London regarding the mainstream mortgage lender Northern Rock, which reported a state of dyer financial emergency in the wake of over exposure to the sub-prime sector.

The euro, officially the currency in the thirteen EU nations deemed to be within the ‘eurozone’ has been driven in recent days by positive measurements from within the EU economy.
Firstly, Chairman of the European Central Bank Jean-Claude Trichet underlined that in his view there were no fundamental problems with the EU economy, and it was emphatically not on the road to recession.

Just a day later, the Bank of France revised its French growth forecasts upwards by almost 1%, reflecting an increase in outlook for the French economy and the Eurozone as a whole.

Additionally, the pound has taken a battering in recent weeks, with investors becoming overly conscious of the impact of a credit squeeze, particularly in light of the Bank of England’s emergency rescue package for lender Northern Rock.

The European Central Bank is also expected to raise interest rates from their current 4% level by the end of this year in a bid to calm the effects of inflation and bring more stability to the Eurozone economy - beneficial news for currency investors. Meanwhile the Bank of England is not expected to raise rates in the short to medium term, with inflation apparently under control.

The added effect of all these factors has been to significantly weaken the value of the pound against the Euro on international money exchanges to its lowest level in fourteen months.

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France is on track to surpass the growth forecasts set by the European Commission which could see wider Eurozone growth up, according to figures released today.

In the figures released by the Bank of France, French economic growth is predicted at 0.6% for the third quarter, with annual growth between 2% and 2.5%, despite the European Commission’s decision to revised growth projections downwards.

The Eurozone economy is now forecast at growth of just 0.5% over the third and the final quarter of 2007, with annual growth forecast to come in at just 1.9%, which saw investor confidence fall for a period and stock market performance decline, particularly amidst the ongoing sub-prime situation.

However, the French news underlines Jean Claude Trichet’s statements of yesterday, in which he refuted the claim that there were any fundamental economic problems with the Eurozone, as suggested that current growth predictions were merely as a result of the impact of externalities from the US and global market conditions.

Meanwhile, INSEE - the French national statistics bureau - suggested inflation was up to 1.3% off the back of the growth, as a direct result of increasing tobacco prices and strong consumer retail sales, which were also a consequence of stronger economic growth over the period

Despite volatility in markets worldwide, and banks adopting a more hostile approach to loaning money to businesses and consumers, the French economy at least appears to be performing well, to the delight of investors and analysts throughout the Eurozone.

Additionally, despite the impact of slower economic growth in the second quarter, the French economy seems to be on track to perform above expectations for the thirteen-nation Eurozone, underlining the general health of the regional economy as a whole.

The news was well received on the French exchange this morning, despite otherwise heavy trading losses through the course of early trading.

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European Central Bank President Jean-Claude Trichet has suggested that there is “no reason to doubt” the European economy and its current health, after growth was revised downwards by the European Commission to reflect a perceived slowdown.

After both France and Germany announced slower than expected growth over the second quarter of 2007, and in the wake of significant market unrest across Europe as a result of the sub-prime situation, the European Commission announced yesterday that it was revising growth downwards by a 0.1% point on the year, reflecting a downturn in growth from last year’s figures.

Mr Trichet was also quick to point out that credit rating agencies had a strong role to play in the ongoing credit crisis around the world, citing a conflict of interests between rating bank creditworthiness and accepting fees from the same institutions.

When quizzed about recent statements from Alan Greenspan, formerly Chairman of the Federal Reserve, which indicated that the US was in for a recession, Trichet dismissed the applicability of the US situation to the Eurozone economy, stating that recession is ‘not appropriate’ to describe the EU economy, and that on a fundamental level the thirteen-nation Eurozone was economically ’sound’.

Much of the market instability has been derived as a direct consequence of the US sub-prime lending sector. As a result of growing credit fears amidst a tightening liquidity environment, markets have been thrown into chaos with business investment and consumer borrowing significantly down. As a consequence, many global economies have opted to sit on the fence with economic policy until the situation is calmed, at the expense of their own domestic economies.

Whilst Mr Trichet suggested that recession was not around the corner for the European economy, he was quick to reiterate that at present, markets remain uncertain and that the extent of externalities from the US was interfering with the EU’s ability to regulate its own economy.

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The European Commission has today announced its revised prediction for Eurozone growth over the coming months, after recent market volatility and poorer than expected economic results from some of the region’s major economies.

The Commission, based in Brussels, has predicted that the 13-nation Eurozone economy will grow by around 2.5% through the remainder of 2007. Previously, the Commission had forecast a 2.6% growth, below the 2.7% growth figure for the year 2006 reflecting a wider slowdown in Eurozone economic activity.

On top of the news of the slowdown, the Commission also forecast that the poor growth figures could worsen over the course of 2008, seeing a significant blow for the European economy over the next twelve months.

Recent market upset stateside had caused European mortgage lenders to adopt a more risky lending outlook. Additionally, with stock markets in turmoil, business investment has been less readily available throughout the Eurozone over the last few months, which has led to this downwards revision in growth.

European banks fearing over exposure to the sub-prime sector have withheld business investment, which has seen a major downturn in corporate activity over the year. With liquidity a premium, businesses and consumers across the world, and indeed the Eurozone, are finding it harder to raise finance from lending institutions.

Additionally, with France and Germany announcing sluggish growth over the second quarter of 2007, it had begun to look unlikely that previous growth figures would be realistic over the latter half of this year.

The slower economic growth has done nothing to dampen the spirits of stock market trading, which was buoyed across Europe and the US in light of positive American economy news and a shock OPEC announcement that oil production is to rise over the latter half of this year. However, it remains to be seen whether the downturn will have an adverse effect on trade tomorrow.

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Industrial output in France rose beyond analyst expectations over the course of July according to official figures released today, suggesting that the French economy may be performing better than had been previously thought.

In the figures released today by the French national statistics office, industrial output grew faster than many analysts had predicted, seeing a 1.3% growth from the previous month’s figures, compared to widespread projections of just a 0.4% growth.

The news comes amidst fears that the French economy was in for a slowdown after data showing a decline of 0.6% in industrial output over June, and slowed economic growth over the second quarter of the year which reflected an overall poor outlook for growth across the Eurozone.

With European growth falling short of analyst expectations, and fears that the ECB could be poised next month to increase interest rates, the news comes as a pleasant surprise for the French economy.

With production increasing in July, largely driven by the automobile manufacturing sector, these fears were largely dismissed by the results released today helping to buoy otherwise rock-bottom investor confidence.

In July, car manufacturing output selectively had grown by 4.7% from June after falling over the course of that month, reflecting a significant turnaround in fortunes for the French manufacturing sector, and analysts are hoping, for the economy overall.

With stiff competition from German manufacturing, and overall poor economic performance in recent years, the French markets enjoyed the boost through today’s figures, trading up slightly amidst other negative factors.

The hope amongst investors now is that the economy will continue to gain and build upon this momentum. With France undergoing widespread economic reform within the boundaries of the Eurozone, analysts are optimistic that today’s result could be indicative of a turnaround of the French economy.

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The German economy has enjoyed yet another growth in its trade surplus, in spite of a decline in exports over July, according to official figures released today.

In the figures, released by the Federal Statistics Office, the surplus was shown to be a result of a slight dip in the value of exports compared to a sharp drop of 2.4% in imports over the period.

The trade surplus measures the gap between imports and exports, reflected in terms of either a positive, surplus value or a negative deficit in trade.

The trade surplus increased to 16.5 billion euros ($22.5 billion), up 1.5 billion euros from June’s figure. Despite their slight decline, exports are currently sitting around record high levels, reflected by record German output and demand for German-manufactured goods.

The German economy, within the thirteen-nation Eurozone, has seen something of a recovery over recent years, despite a very recent dampening of growth and performance, probably as a result of worries from the US.

With the sub-prime market still unresolved and banks short of billions, and the European Central Bank likely to raise interest rates to 4.25% later in the year, the German economy could be in for some turmoil in the near future, taking the shine off its recent economic recovery.

Analysts have shied from predicting the outlook for the market over the next few months, with falling investor confidence and the ongoing sub-prime saga ad market volatility making it too hard to accurately forecast where the economy will be in six months to a year’s time.

However, with German investor confidence having officially fallen, and manufacturing orders significantly down for July, not to mention sluggish growth over the second quarter for the Eurozone’s largest economy, the outlook for the next year may be starting to look more bleak.

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The European Central Bank has today announced its decision to maintain interest rates throughout the Eurozone over the next month, amidst growing fears of continued volatility in world markets.

The European Central Bank announced the move today after the meeting of its policy committee, in which it is widely expected the issue of current market conditions and mixed internal economic indicators were behind the decision to maintain rates at their current level.

Until the recent upset caused by ongoing sub-prime mortgage lending crisis, and fears of a credit crunch, analysts had expected the ECB to raise rates to 4.25% in a bid to reign in economic growth and prevent inflationary pressures.

The decision came unanimously from the committee, and was later justified by ECB president Trichet as being a prudent move given the recent unsettling market conditions caused by the US housing market.

Whilst he said that the fundamental aspects of European growth were in place, the extent of the upheaval from the US markets has made it impossible to make any policy decision other than maintaining rates at their current level.

With the European Central Bank having risen rates no less than eight times over the last two years, with rising inflationary pressures as a consequence of strong regional growth, analysts had expected that rates would continue to rise over this month to keep inflation in check.

However with growth slowing as a result of market unrest and falling investor confidence, the Bank have decided not to progress further with any rate intervention as a result of the impact of these external factors.

Similarly today, the Bank of England also announced its decision to maintain interest rates in the UK at 5.75%, for reasons similar to those borne by the ECB, which will see most of Europe freeze rates for the next period.

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The European Central Bank are set to meet tomorrow to discuss interest rate policy amongst the thirteen nation Eurozone for the coming month.

The European Central Bank determines rate policy for the thirteen member states of the Eurozone, and is expected to keep rates on hold after early predictions of a rise failed to materialize as a likely option.

Analysts have widely predicted that rates will remain the same over the next month, with financial markets continuing uncertainty likely to be the main persuasive factor in the decision to maintain rates, along with tightening credit conditions across the globe.

Up until markets had been thrown into uncertainty by bad news from the US and the ongoing crisis in sub-prime lending, the European Central Bank had been expected to raise rates from 4% to 4.25% for the thirteen nations in the single currency zone.

Also scheduled for tomorrow, the Bank of England in London will be meeting to fix interest rates, which are again predicted to be maintained for the next month at 5.75% in order to allow the UK economy to settle down a find a rhythm unaffected by the global stock market volatility.

Meanwhile banks in Australia, Canada and Brazil also maintained their interest rates, for fear of upsetting the global financial market and causing further unrest in the global finance sector.

With the US sub-prime sector yet again causing problems for liquidity at lending institutions, central banks across the world have maintained interest rates in order to prevent any further volatility in trading, in what has been described as a ‘wait and see’ measure.

Inflation within the Eurozone had been down to 1.8%, within the European Central Bank’s unofficial comfort zone, with growth slowing across most of the major European economies singularly, and the region as a whole.

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Growth across the Eurozone has halved over the period March to June 2007, according to official figures today, citing weaker corporate investment as the pivotal factor in the downturn.

The figures released today show a growth in the 13-nation Eurozone of 2.5% over the period on the year, which can be simplified to growth of 0.3% from last quarter.

The slowdown had been widely anticipated by analysts, off the back of widespread reports of falling investor confidence in Germany and France. With financial markets across the world in turmoil, and stock exchanges trading delicately even now, it is no surprise that corporate investment was down over the last quarter, prompting this slowdown.

The first quarter of 2007 saw the regional economy grow by 0.7%, before today’s growth of just 0.3%, which analysts predict is merely a temporary side effect of the world economic climate.

With stock markets now fitting back into some form of normal trading pattern, it could be proposed that investment should naturally return over the course of the coming months.

Investment in business throughout the Eurozone was down by 0.2% over the period after growth of 2% over the course of the first quarter. However, with markets across Europe affected by the fallout from the US economy, it’s understandable that economic growth should take a back seat.

Meanwhile, the European Central Bank is scheduled to meet this Thursday to discuss interest rate policy. With current market conditions, today’s announcement is set to further cement holding rates for the time being, to allow markets to settle down from the effects of macro-economic externalities.

In separate figures, the Eurozone economy benefited from strong exports in manufacturing and services, whilst imports remained modest through the majority of sectors, with internal EU trade accounting for domestic consumption.

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A former French cabinet minister is widely considered to be favourite to take over as the head of the International Monetary Fund (IMF), according to analysts in what has been very much a two-horse race.

Dominique Strauss-Kahn, the former French minister for finance is the favourite to take over the top role at the IMF, with nominations having closed over the weekend. Should Strauss-Kahn succeed to the position, he will add to the depth of French control of world economic organisations, from the World Trade Organisation to the European Central Bank.

He is expected to succeed current head Rodrigo de Rato, provided he is chosen above former Czech Prime Minister Josef Tosovsky, the only other candidate in consideration.

The Russia-endorsed former Czech leader was presented as a nomination reportedly to break the convention of European nations choosing the head of the IMF in return for the US nominating the head of the World Bank.

Until now, the top job at the IMF has been reserved to applicants from within the European Union countries, which many have criticised as being unreflective of global political power.

Analysts have widely predicted that Strauss-Kahn will take over, despite Josef Tosovsky being favoured earlier on in the contest. With political clout and sufficient experience to handle the role, it is regarded as almost certain that the former French finance minister will succeed to the position.

The IMF responsibilities cover poor, third world nations, and advising on financial strategy and aid. Additionally, it is responsible for maintaining stability in global financial markets.

However, it has come under fire from some third world nations, citing the first world domination of the IMF as well as ‘rigid’ policy implementation which can often conflict with other political aims of these countries.

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