24th Oct 2016

EU capitals back French minister for IMF post

Britain, Germany and a handful of other countries over the weekend backed French finance minister Christine Lagarde to become the next chief of the International Monetary Fund after the resignation of Dominique Strauss-Kahn.

London was the first capital to throw its weight behind the 55-year old French minister, who would be the first woman ever to chair the IMF. The move comes despite growing calls from emerging economies to have the institution chaired by someone from outside Europe.

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  • If nominated for the post, Christine Lagarde would be the first female IMF chief (Photo: Adam Tinworth)

"On the basis of merit, I believe Christine is the outstanding candidate for the IMF -- and that's why Britain will back her," British chancellor George Osborne said in a statement on Saturday (21 March).

"She's shown real international leadership as chair of the G20 finance ministers this year. She has also been a strong advocate for countries tackling high budget deficits and living within their means," he noted.

German finance minister Wolfgang Schauble made similar comments in an interview published on Sunday in Bild, the largest-selling German newspaper: "If Christine Lagarde decided to be a candidate, Europe would have the best chance of occupying this position again."

Seeing in Lagarde a figure "respected and appreciated throughout the world of finance," Schauble said it was "essential" that all other EU member states back her.

Austria, Italy and Luxembourg followed suit, with a formal announcement about Lagarde's candidateship likely to be made at a G8 summit in Deauville, on Thursday. From outside Europe, support came on Monday from New Zealand, with Prime Minister John Key describing her as "super impressive".

The top post was thrown open last week, when Dominique Strauss-Kahn resigned after being arrested in New York on charges of sexually assaulting a hotel maid. He maintains he is innocent.

Emerging powers like China and Brazil are however contesting the likely appointment of another European. A longstanding gentleman's agreement sees the IMF top post go to an economist from Europe, while the chairmanship of the World Bank is taken up by an American.

A probe into Lagarde's behaviour as minister regarding her potential misuse of authority by intervening in a banking scandal has also been floated as a potential problem for her candidature.

Meanwhile, Belgian finance minister Didier Reynders has also indicated he is interested in the post, but admits that he has fewer chances than Lagarde, Belgian daily Le Soir reports.

Other potential candidates from outside Europe are Indian economist Montek Singh Ahluwalia, Mexican central banker Agustin Carstens and South Africa's former finance minister Trevor Manuel.

The IMF said Friday the nomination process would run from Monday until 10 June, with the aim of completing the process by the end of June.


Europe ready to tackle Greek debt relief

The Greek government has built and broadened alliances in EU institutions and member-states that acknowledge the need to restructure the debt and deliver another economic model for the eurozone.

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