updated 3/4/2004 3:46:59 PM ET 2004-03-04T20:46:59

Horst Koehler on Thursday announced his resignation on as head of the International Monetary Fund to become a candidate for the German presidency, a largely ceremonial job.

Koehler, who has headed the IMF since 2000, will be nominated as the presidential candidate of Germany’s center-right parties, an official in Germany said Thursday.

Koehler, 61, held a variety of posts in Germany’s ministries of economics and finance from 1976-1989.

Word of Koehler’s pending nomination followed a meeting in Berlin of the Christian Democratic Union, which lasted until early Thursday. The official, who spoke on condition of anonymity, said two smaller parties, the Bavaria-only Christian Social Union and the Free Democrats, had given their approval.

Koehler took the lead at the IMF after a bitter trans-Atlantic battle in which the United States rejected Germany’s first choice for the job, Caio-Koch Wesser, then a World Bank executive, as not sufficiently experienced.

Koehler had critics
At the time, some officials and business executives questioned whether he was up to leading a major financial organization at a time that it was heavily criticized for imposing wrenching economic reforms in exchange for emergency loans.

The search for a replacement for Koehler is likely to be discussed at a meeting of European Union finance ministers Monday, European officials said.

The president of the European Bank for Reconstruction and Development declined to comment Thursday on whether he would be interested in replacing Koehler.

Jean Lemierre of France succeeded Koehler at the bank, when the German left to become head of the IMF in 2000. Another possible candidate is Andrew Crockett, a Briton who formerly headed the Bank for International Settlements.

Under an informal agreement after World War II, when the IMF and the World Bank were established, the bank is headed by an American president and the fund is led by a European managing director.


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