Mon Dec 05 20:31:42 SAST 2016

France says China backs Lagarde for IMF

Reuters | 2011-05-24 20:34:02.00 Comments
French Finance Minister Christine Lagarde, centre, is said to be a favoured candidate by the US Picture: JONATHAN ERNST/REUTERS

China would support French Finance Minister Christine Lagarde as the next IMF chief, the French government said, backing which would put her in pole position to succeed Dominique Strauss-Kahn.

Lagarde has emerged as the leading candidate to replace Strauss-Kahn, who quit last week to fight sexual assault charges in New York, although Mexico is pushing its central bank chief as an alternative and many emerging nations say it is time for Europe’s 60-year grip on the top job at the International Monetary Fund to be loosened.

European governments want to retain their traditional control over the leadership of the multilateral lender while it is involved in major bailouts of Greece, Ireland and Portugal.

A number, including Britain and Italy, have said they would back Lagarde ,and Ireland added its support on Tuesday. Germany has yet to declare, but Chancellor Angela Merkel says she rates Lagarde highly.

“It’s a European consensus,” Francois Baroin, France’s budget minister and government spokesman, told Europe 1 radio of views on Lagarde as a contender for the job.

“The euro needs our attention, we need to have the Europeans (on board), the Chinese support the candidacy of Christine Lagarde,” he said.

China’s Foreign Ministry said it had no comment on whether Beijing would back Lagarde, a 55-year-old former lawyer.

The one potential hitch facing Lagarde is a possible legal probe into her role in a 2008 payout to a prominent businessman to settle a dispute with a state-owned bank. Judges will rule on June 10 — the same date countries must submit candidates for the IMF job — on whether to launch an inquiry.

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.

An adviser to the People’s Bank of China, Xia Bin, told Reuters a bigger issue than the succession was the United States’ dominant voting share at the IMF.

Wu Qing, a researcher with the Development Research Centre government think tank in Beijing, said it seemed logical China would support Lagarde or any other well-qualified European.

“It’s not likely that China would back someone from Asia, especially from within China. There still aren’t many people within the Chinese system with an extensive international background,” he said. “I don’t think it matters much to China whether the next IMF head is French or any other European.” Ireland’s Europe minister, Lucinda Creighton, said it was quite likely Ireland would back a Lagarde candidacy.

“Already you have the backing of New Zealand and a number of European member states for Christine Lagarde. I think it’s quite possible that the US will row in behind her as well,” Creighton told state broadcaster RTE.


A “gentleman’s agreement” has always had a European lead the IMF and an American head the World Bank, but fast-growing emerging nations are seeking a larger role in global organisations.

US Undersecretary of State Robert Hormats told Reuters Insider TV that Washington was talking to several countries about the IMF succession. “There are a lot of very qualified candidates,” he said.

Sources in Washington have said the United States would back a European. The United States and European nations jointly hold more than half of the IMF’s votes, giving them enough power to decide who leads it.

The fund is currently being run by its No. 2 official, John Lipksy, who has said he wants to step down in August, and it has set a June 30 deadline to pick a permanent head.

South African Finance Minister Trevor Manuel, who sources say could also emerge as a candidate, said on Monday the IMF’s tradition of choosing its head from Europe had to change.

“You must have open recruitment processes,” he said. “It has to be wrong for multilateral bodies to have recruitment processes where birth right is more important than ability. The old order has to pass.”

Mexico’s central bank governor, Agustin Carstens, said on Tuesday some countries have expressed sympathy for his candidacy and that he has had some conversations with US officials on the matter.

“I have heard expressions of sympathy, but most countries in a responsible way are waiting to see who the candidates are,” Carstens told Bloomberg TV.

Brazil appeared reluctant to back Carstens, saying more time was needed to make a choice.

Brazilian government sources said some officials feel Carstens is a long shot for the job.

Meanwhile, Russia has said it would back Kazakhstan’s central bank chief, Grigory Marchenko, as a candidate.

Lagarde, a skilled negotiator and fluent English-speaker who was named the euro zone’s best finance minister last year by the Financial Times, has not commented on her possible nomination but few doubt she would want the job.

To submit comments you must first

Join the discussion & Debate

France says China backs Lagarde for IMF

For Commenters Consideration | Please stick to the subject matter
Mon Dec 05 20:31:42 SAST 2016 ::