Lagarde at IMF not bad for Ireland - Minister

 

DUBLIN WON’T back French finance minister Christine Lagarde for the leadership of the International Monetary Fund in advance of her expected nomination as Europe’s candidate but would be happy to support her if she is chosen, Minister of State Lucinda Creighton said.

In Brussels for meetings of EU foreign ministers, Ms Creighton took issue with those who say any move to make Ms Lagarde managing director of the IMF in succession to Dominique Strauss-Kahn would be bad for Ireland.

“She’s not a formal candidate yet to my knowledge. There is a lot of speculation. We would certainly be anxious to have a European head up the IMF, I think particularly in the current economic circumstances in Europe and the euro zone,” Ms Creighton told reporters. “Lagarde is certainly somebody that we have a good relationship with and who – despite what I was hearing on the airwaves over the weekend in Dublin – has been quite supportive and sensitive to the Irish position.

“So we wouldn’t have any concerns about her if she is nominated formally as a candidate. If there is agreement among the member states, we’ll certainly be happy to offer our support if that transpires.”

Asked whether it was the case that the Government would not declare support for Ms Lagarde before she became a formal candidate, Ms Creighton said “We wouldn’t take a position on it until such time as she would be formally nominated.” She went on: “But I would anticipate that we would be very well disposed to her candidature.”

With Mr Strauss-Kahn under house arrest and armed guard, emerging market countries have stepped up their campaign for the appointment of a non-European to succeed him.

Although Mexican central bank chief Agustín Carstens is soon expected to be named formally as a candidate by Mexican finance minister Ernesto Cordero, European officials believe the US is unlikely to stray from its traditional support for a European candidate. This would ensure the success of a European nominee.

Tánaiste and Minister for Foreign Affairs Eamon Gilmore and Minister for Finance Michael Noonan are each due to meet their French counterparts this week as the Government tries again to win support for a cut in the interest rate on Ireland’s bailout loans.

Ms Creighton said it was not a particular concern for the Government to secure a deal to cut the rate before any new minister was appointed to replace Ms Lagarde if she went to the IMF.

“At the end of the day, these are executive decisions. While Christine Lagarde is influential and is important, I think we are well aware that the Élysée Palace is extremely important in all of this,” she said in reference to the seat of power of president Nicolas Sarkozy. “I think it’s important that we work on our relations right across the French government and, whoever replaces Christine Lagarde, I would expect would continue the friendly relations towards Ireland.”

France is known to have pressed other European governments to declare public support for Ms Lagarde. Ms Creighton said she could not speak for Taoiseach Enda Kenny but said “he may have been too busy to take a phone call” due to the visits of Queen Elizabeth and Barack Obama.

An IMF staff report on Ireland last Friday was “helpful” to Ireland’s case for a rate cut, Ms Creighton said. “There is a growing view amongst the various member states that Ireland is doing well. That’s what I’m hearing from my counterparts,” she said.

“There is a distinction between us and the other member states that are in IMF programmes so there’s a question mark as to why the issue of the interest rate hasn’t been resolved.”

South Africa’s former finance minister Trevor Manuel remained tight-lipped yesterday over speculation linking him to the IMF’s top job, but he supported the view it could be filled by someone from the developing world.

Mr Manuel, who is currently South Africa’s minister for planning, said it “has to be wrong” that the IMF operated a recruitment policy in which birth-right held more sway than a person’s ability.

Mr Manuel is well regarded for the manner in which he steered post-apartheid South Africa’s shattered economy towards growth as finance minister between 1996 and 2009. He also chaired the IMF board of governors in 2000 and its development committee from 2001-05.