Lagarde chosen to lead IMF; first woman in top job

French Finance Min­is­ter Chris­tine Lagarde speaks to the media out­side the Inter­na­tional Mon­e­tary Fund in Wash­ing­ton. Lagarde is expected to be cho­sen to be the new leader of the Inter­na­tional Mon­e­tary Fund. She would replace Dominique Strauss-Kahn, who resigned last month after being charged with sex­u­ally assault­ing a New York City housekeeper.

CHRISTOPHER S. RUGABER

Asso­ci­ated Press

WASHINGTON — French Finance Min­is­ter Chris­tine Lagarde has been cho­sen to lead the Inter­na­tional Mon­e­tary Fund. She will become the first female man­ag­ing direc­tor of the global lend­ing organization.

Lagarde’s selec­tion became all but assured when the Obama admin­is­tra­tion endorsed her ear­lier Tues­day. Hours later, the IMF’s 24-member board voted to appoint her to the posi­tion. She had also won sup­port from Europe, China and Russia.

“I am deeply hon­ored by the trust placed in me,” Lagarde said in a state­ment after the vote. “I would like to thank the fund’s global mem­ber­ship warmly for the broad-based sup­port I have received.”

Lagarde will face imme­di­ate chal­lenges once she begins a five-year term next week.

She’ll have to prod fel­low Euro­pean offi­cials to take painful steps to pre­vent a default by Greece. She’ll face pres­sure from emerg­ing nations that want a greater voice at the IMF. And she’ll be looked upon to restore the organization’s rep­u­ta­tion, which was tarred by a scan­dal involv­ing the man she replaced.

Dominique Strauss-Kahn resigned last month after being charged with sex­u­ally assault­ing a New York City hotel house­keeper. He has denied the charges.

She was cho­sen by con­sen­sus, the IMF said in a state­ment. Mexico’s Agustin Carstens chal­lenged her, but his can­di­dacy never caught fire.

Lagarde’s “excep­tional tal­ent and broad expe­ri­ence will pro­vide invalu­able lead­er­ship … at a crit­i­cal time for the global econ­omy,” U.S. Trea­sury Sec­re­tary Tim­o­thy Gei­th­ner said.

Lagarde, 55, will be the first per­son to lead the IMF who isn’t an econ­o­mist. She led the Chicago-based law firm Baker & McKen­zie before enter­ing French pol­i­tics in 2005. She speaks impec­ca­ble Eng­lish and spent much of her career in the United States.

As one of the longest-serving min­is­ters under French Pres­i­dent Nico­las Sarkozy, she made the country’s labor mar­ket rules more flex­i­ble. Forbes has listed her among the world’s most pow­er­ful women.

Her appoint­ment puts two women in promi­nent lead­er­ship roles at the orga­ni­za­tion. In April, Nemat Shafik, an Egypt­ian econ­o­mist and for­mer World Bank offi­cial, was appointed a top deputy at the fund. Shafik said last month the IMF is boost­ing its efforts to recruit women. The fund wants 25 per­cent to 30 per­cent of its man­age­ment posi­tions to be held by women by 2014, Shafik said.

In addi­tion to the most recent charges, Strauss-Kahn was rep­ri­manded in 2008 for hav­ing a brief affair with a sub­or­di­nate, though he faced no dis­ci­pli­nary action.

Lagarde told the IMF’s board last week that the man­ag­ing direc­tor “has to lead by exam­ple.” She promised to “restore staff pride in work­ing at the IMF” as part of a “heal­ing process.”

Lagarde will be expected to help sta­bi­lize Europe’s debt crisis.

“This will put her in the posi­tion to work more closely with her Euro­pean coun­ter­parts and push them if needed,” said Domenico Lom­bardi, a senior fel­low at the Brook­ings Insti­tu­tion and a for­mer mem­ber of the IMF’s exec­u­tive board.

That’s likely one rea­son why even some devel­op­ing coun­tries, such as China, sup­ported her can­di­dacy, Lom­bardi said. China owns bil­lions of dol­lars in euro-dominated bonds and has lit­tle inter­est in see­ing the Euro­pean debt cri­sis worsen.

Posted by AP News on Jun 28 2011. You can follow any responses to this entry through the RSS Feed. Comments can be made below.