Lagarde candidacy for IMF post gains pace

 

PARIS – French finance minister Christine Lagarde’s candidacy to head of the International Monetary Fund gained momentum yesterday with a close ally of French president Nicolas Sarkozy saying she already the backing of several countries.

Interior minister Claude Gueant, former chief of staff to Mr Sarkozy and one of his top advisers for the past four years, said Ms Lagarde would make an excellent head of the Washington-based lender, becoming the first member of France’s cabinet to openly tout her credentials.

The race for the leadership of the IMF was thrown open on Thursday, at a crucial time for Europe’s debt crisis and the fragile global recovery, when Frenchman Dominique Strauss-Kahn resigned after being arrested on charges of attempted rape. His departure opened a tug of war between Europe and emerging economies, which argue it is time to end 65 years of European domination of the post.

“I hope it will be a European and Christine Lagarde obviously has all the qualities to be an excellent director of the IMF. And besides, many countries support her,” Mr Gueant told Europe 1 radio.

With the IMF due to accept nominations from today, European powers have already started to close ranks behind a regional candidate, saying it was crucial the next managing director had knowledge of Europe, where the lender is heavily involved.

On Saturday, British chancellor of the exchequer George Osborne said Ms Lagarde, a 55-year-old former lawyer, was an “outstanding candidate” and German chancellor Angela Merkel called her an experienced “figure of excellent standing”.

With the support of the region’s three largest economies appearing to guarantee Ms Lagarde the European nomination, she would only realistically require the backing of the United States to secure the IMF post.

Leaders from the G8 group of industrialised powers are expected to discuss a replacement for Mr Strauss-Kahn at a summit this week in the French coastal resort of Deauville, but it was not yet clear if they would make any formal announcement.

Ms Lagarde’s chances received a boost last Friday when former Turkish economy minister Kema Dervis, seen as the leading emerging market candidate, ruled himself out of the running.

Mexico, however, is leaning towards nominating its central bank chief Agustin Carstens, a former deputy managing director at the fund.

The finance ministers of Australia and South Africa, who jointly chair a G20 committee on reform of the IMF, said yesterday the tradition that the fund’s managing director was a European was out of date and called for G20 nations to honour a pledge made in Pittsburgh two years ago for an open selection. The IMF board has said a new chief would be appointed by June 30th, allowing enough time to resolve the case.