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Lagarde announces candidacy to head IMF

Text by News Wires

Latest update : 2011-05-25

French Finance Minister Christine Lagarde launched her candidacy to become the new head of the International Monetary Fund on Wednesday following the resignation of former chief Dominique Strauss-Kahn amid sexual assault allegations.

REUTERS - France’s Christine Lagarde has entered the race to head the IMF despite anger in big emerging economies over Europe’s “obsolete” lock on the job.
 
France’s finance minister announced her candidacy on Wednesday, the eve of a G8 summit, after securing the unanimous backing of the 27-nation European Union and, diplomats said, support from the United States and China.
 
“It is an immense challenge which I approach with humility and in the hope of achieving the broadest possible consensus,” Lagarde told a Paris news conference.
 

"I've decided to present my candidature..."

The 55-year-old former corporate lawyer, who speaks fluent English, has won plaudits for her deft chairing of the G20 finance ministers and communications skills.

 
But unlike Dominique Strauss-Kahn, who resigned last week after being charged with attempted rape, she is not an economist and may struggle to match his thought leadership over the management of the world economy.
 
Brazil, Russia, India, China and South Africa criticized EU officials in a joint statement for suggesting the next International Monetary Fund head should be a European, a convention that dates back to the founding of the global lender at the end of the Second World War.
 
However, the countries known as the BRICs failed to unite behind a common alternative candidate, leaving the way clear for Lagarde unless she slips on a pending French legal case.
 
Diplomats said the complaint was mostly aimed at securing a commitment from developed countries that nationality will no longer be a covert criterion for selecting future IMF chiefs.
 
In a nod to the emerging nations’ concerns, Lagarde said she would work for “greater representativity and greater flexibility” at the IMF if elected.
 
BRICs aggrieved
 
In the first joint statement issued by their directors at the Fund, the BRICs said the choice of who heads the IMF should be based on competence, not nationality. They called for “abandoning the obsolete unwritten convention that requires that the head of the IMF be necessarily from Europe.”
 
Lagarde said she was running as a candidate to serve all IMF members, not just Europe, although she noted her experience and good relations with European officials would be an advantage in steering the IMF’s role in the bloc’s debt crisis.
 
“Being European shouldn’t be a plus, but it shouldn’t be a minus either,” Lagarde said.
 
Hours before the statement was issued in Washington, France’s government said China would back Lagarde. The Chinese Foreign Ministry declined comment.
 
Some emerging market government officials say privately that although they are fed up with advanced economies controlling the selection process, they are not in a position to put forward a challenger who could stand up to Lagarde.
 
Mexico has nominated its central bank chief for the job and he said some countries had welcomed his decision to run. South Africa and Kazakhstan may put forward their own candidates.
 
Under a long-standing agreement between the United States and Europe, the top job at the IMF goes to a European while an American leads its sister organisation, the World Bank. The United States also fills the number two position at the IMF.
 
European diplomats said Washington had asked the French government about the legal case hanging over Lagarde, in which she faces accusations of abusing her authority.
 
The Court of Justice of the Republic, a special court created to try ministers for alleged offences committed while in office, is examining the procedure followed in awarding the 285 million euro settlement to Bernard Tapie, a convicted ex-minister who backed Sarkozy’s 2007 election campaign.
 
French officials have told other governments privately the case will not be a show-stopper, the diplomats said.
 
Lagarde said her conscience was clear.
 
“I have every confidence in this procedure because my conscience is perfectly clear,” she said. “I acted in the interest of the state and in respect of the law.”
 
US backs European
 
The EU and the United States, which sources in Washington have said will back a European, have enough joint voting power to decide who leads the IMF.
 
Securing support from some emerging economies would defuse a potentially bitter row over the decision though.
 
In April 2009, the Group of 20 leading nations endorsed “an open, transparent and merit-based selection process” for heads of the global institutions.
 
France, which presides over the G20 this year, has made an effort to work with Beijing on key issues for developing nations like global monetary reform and commodity market speculation.
 
Last week, the head of China’s central bank, Zhou Xiaochuan, said the IMF’s leadership should reflect the growing stature of emerging economies. But he stopped short of saying its new boss should be from an emerging economy.
 
Wu Qing, a researcher with the Development Research Centre government think tank in Beijing, said it was plausible that China would support Lagarde as there weren’t many qualified candidates from China or Asia in general.
 
The IMF’s board will draw up a shortlist of three candidates and has a June 30 deadline for picking a successor.

Date created : 2011-05-25

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