European support rising for Lagarde’s IMF bid

France’s Finance and Econ­omy Min­is­ter Chris­tine Lagarde vis­its a Parisian super­mar­ket and goods retailer in Paris Thurs­day. Lagarde has emerged as a poten­tial can­di­date to replace IMF chief, French­man Dominique Strauss-Kahn who resigned Wednes­day, say­ing he wants to devote “all his ener­gy” to fight­ing sex­ual assault charges in New York. (Asso­ci­ated Press | Jacques Brinon)

ANGELA CHARLTON

Asso­ci­ated Press

PARIS — France’s frank, hard-working and chic finance min­is­ter, Chris­tine Lagarde, emerged Fri­day as Europe’s likely choice to lead the Inter­na­tional Mon­e­tary Fund.

The IMF insists the depar­ture of for­mer chief Dominique Strauss-Kahn has not hurt its day-to-day oper­a­tions, but it is clearly under pres­sure to find a suc­ces­sor fast to lead an orga­ni­za­tion that pro­vides bil­lions in loans to sta­bi­lize the world econ­omy. A new chief would also draw atten­tion away from the seamy scan­dal sur­round­ing Strauss-Kahn, who quit this week to face charges in New York that he tried to rape a hotel maid.

Lagarde’s chances for the top IMF job got a boost Fri­day when Kemal Dervis, a for­mer finance min­is­ter for Turkey, said he did not want to be con­sid­ered for the job.

Dervis, who had been con­sid­ered per­haps the lead­ing non-European can­di­date, said he was happy in his cur­rent posi­tion at the Brook­ings Insti­tu­tion, a Wash­ing­ton think tank. Dervis is a promi­nent econ­o­mist who had spent 24 years at the World Bank, the IMF’s sis­ter lend­ing institution.

Trea­sury Sec­re­tary Tim­o­thy Gei­th­ner said in a state­ment Fri­day that the United States was con­sult­ing broadly with IMF mem­ber coun­tries “from emerg­ing mar­kets as well as advanced economies” dur­ing the search process for a new IMF leader.

A Trea­sury offi­cial on Thurs­day said the United States has not made a deci­sion yet on whether to sup­port Lagarde or a non-European for the job.

The IMF may face a choice between nam­ing its first woman leader or its first leader from the devel­op­ing world. Emerg­ing economies see Europe’s tra­di­tional stran­gle­hold on the posi­tion as increas­ingly out of touch with the world econ­omy, but have not yet united around a candidate.

Ger­man Chan­cel­lor Angela Merkel said Fri­day that she “very much appre­ci­ates the French finance min­is­ter.” She insisted she wasn’t announc­ing Lagarde’s can­di­dacy, just shar­ing her views.

Merkel has also said the next IMF chief should be a Euro­pean, since the fund is deeply involved in tack­ling the eurozone’s sprawl­ing debt cri­sis. Germany’s view is crit­i­cal, since as the continent’s eco­nomic pow­er­house it funds much of the bailouts to weaker euro­zone nations.

Lagarde, 55, has a clean-cut image and has been praised for her acu­men in help­ing steer Europe through the global finan­cial cri­sis and its more recent debt woes. She speaks impec­ca­ble Eng­lish and spent much of her career in the United States as a lawyer. One of the longest-serving min­is­ters under French Pres­i­dent Nico­las Sarkozy, Lagarde eased French labor laws and helped France weather its worst reces­sion since World War II bet­ter than many other devel­oped countries.

A cham­pion swim­mer as a teen, Lagarde is known for her col­or­ful lan­guage and a sense of humor, and for being vocally pro-market in a capitalism-wary nation. When she took over as finance min­is­ter, she urged com­pa­tri­ots to stop their end­less ide­o­log­i­cal yam­mer­ing and “roll up your sleeves.”

Ital­ian Prime Min­is­ter Sil­vio Berlus­coni has openly endorsed Lagarde for the job, say­ing she would make “a great choice.” That view was backed by Swedish Finance Min­is­ter Anders Borg, who told jour­nal­ists that Lagarde car­ries weight inter­na­tion­ally and has a lot of experience.

Sarkozy hasn’t spo­ken pub­licly about Lagarde, pos­si­bly because that would feed domes­tic con­spir­acy the­o­ries that Strauss-Kahn’s trou­bles are a plot by polit­i­cal rivals. Strauss-Kahn, a Social­ist, had been seen as the poten­tial win­ner of France’s pres­i­den­tial elec­tion next year, while the con­ser­v­a­tive Sarkozy’s poll rat­ings are dismal.

The French for­eign min­is­ter, how­ever, expressed con­fi­dence that his con­ti­nent would keep the job.

“Europe still has IMF lead­er­ship guar­an­teed,” Alain Juppe said Fri­day. “We have excel­lent can­di­dates for the posi­tion and it would be won­der­ful if we agreed on a can­di­date that would then be accepted by the IMF board.”

French econ­o­mist Nico­las Bouzou said Lagarde is “emi­nently com­pe­tent” but the fact that she’s French “could pose problems.”

The IMF has already had four French­men at its helm since its incep­tion in the 1940s. French­men also run the World Trade Orga­ni­za­tion, the Euro­pean Cen­tral Bank, the Lon­don Stock Exchange and UEFA, the Euro­pean soc­cer body.

Her gen­der “on the con­trary, could help her,” Bouzou said. The IMF has never had a woman man­ag­ing director.

Ques­tions have also sur­faced about Lagarde’s role in get­ting arbi­tra­tion for mav­er­ick busi­ness­man Bernard Tapie, who won euro285 mil­lion ($449 mil­lion) as com­pen­sa­tion for the mis­han­dling of the 1990s sale of sports­wear maker Adi­das in 2008. Lagarde was finance min­is­ter at the time. No for­mal inves­ti­ga­tion has been announced, but pros­e­cu­tors are look­ing into the matter.

Ger­many, Europe’s biggest econ­omy, appeared hard-pressed to offer any can­di­date who had major-league polit­i­cal clout backed up by eco­nomic expe­ri­ence. For­mer Bun­des­bank chief Axel Weber’s polit­i­cal cap­i­tal suf­fered badly when he resigned ear­lier this year, effec­tively end­ing Germany’s chances of lead­ing the Euro­pean Cen­tral Bank. Among other names men­tioned, for­mer Finance Min­is­ter Peer Stein­brueck is oppo­si­tion party mem­ber and euro­zone bailout fund chief Klaus Regling lacks a high polit­i­cal profile.

John Lip­sky, the IMF’s act­ing man­ag­ing direc­tor, said its 24-member exec­u­tive board is seek­ing a new leader, but there is no indi­ca­tion yet when a deci­sion will be made.

France hosts a meet­ing of the G-8 — a group of eight devel­oped coun­tries — next week in the sea­side resort of Deauville, and all the major decision-makers will be there.

Together, the U.S. and Europe con­trol more than 50 per­cent of the votes on the IMF’s board. A sim­ple major­ity is all that is required to select the group’s leader.

With Dervis with­draw­ing from con­sid­er­a­tion, remain­ing can­di­dates from out­side the EU include Singapore’s finance chief, Thur­man Shan­mu­garat­nam and Indian econ­o­mist Mon­tek Singh Ahluwalia.

Poland said it may pro­pose its own can­di­date, for­mer Finance Min­is­ter Leszek Bal­cerow­icz, who turned Poland’s post-communist econ­omy into a market-driven one.

Gor­don Brown, Britain’s for­mer Labour prime min­is­ter, also ruled him­self out Friday.

“No I am not pitch­ing for the job,” he said while vis­it­ing a pri­mary school in Soweto, South Africa.

Posted by AP News on May 21 2011. You can follow any responses to this entry through the RSS Feed. Comments can be made below.