Saturday

8th May 2021

EU holds on to IMF chairmanship

  • Eurogroup chief Jean-Claude Juncker kisses Lagarde in EU Council (Photo: consilium.europa.eu)

French finance minister Christine Lagarde has been appointed as the new chief of the International Monetary Fund (IMF) at a time of unprecedented economic turmoil in the eurozone.

The Washington-based institution's 24-member board maintained a tradition begun after World War II by picking the European candidate over Mexican central bank governor Agustín Carstens. The appointment of a woman to run the IMF for the first time in its history is a novelty, however.

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"The results are in: I am honoured and delighted," Lagarde said via twitter on Tuesday evening (28 June). She will start her five-year term next Tuesday, taking over from her compatriot, Dominique Strauss-Kahn, who resigned amid rape allegations.

The congratulations began pouring on Tuesday.

US treasury secretary Timothy Geithner praised Lagarde's "exceptional talent and broad experience ... at a critical time for the global economy." European Commission president Jose Manuel Barroso said the 55-year-old French lawyer is an "excellent choice".

Mexico's Carstens won the support of Australia and Canada. With the eurozone and the Greek debt crisis set to dominate the IMF agenda for the foreseeable future, he had questioned whether Lagarde's appointment would amount to a conflict of interest.

Emerging nations including Brazil and China, as well as Russia, threw their weight behind Lagarde following her diplomatic tour of the globe, however.

Lagarde in her acceptance statement acknowledged concerns that the IMF has an overly euro-centric policy, a source of grumbling even before Strauss-Kahn's forced departure.

"I will make it my overriding goal that our institution continues to serve its entire membership," she said.

In an interview with French television shortly afterwards, the minister focused on EU issues and called on the Greek opposition to support the government's austerity package during a parliamentary vote on Wednesday.

Reports suggest that recent weeks have seen growing disquiet inside the IMF over the its lending to Greece, as anti-austerity protests increase in the embattled European state.

Despite a €110 billion EU-IMF aid package for Athens last year, the centre-left government is widely expected to ask for a second bail-out if it survives Wednesday's vote.

Tackling the financial implications of the Arab Spring and simmering tensions over global exchange rates are also among the issues to tackle early into Lagarde's term.

Faced with a daunting set of tasks, Lagarde indicated that she is keen to meet with the fallen Strauss-Kahn.

"I want to have a long talk with him, because a successor should talk with their predecessor," she told French television channel TF1. "I can learn things from what he has to say about the IMF and its teams."

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