Tuesday, June 28, 2011

NEWSMAKER-France's Lagarde faces policy dilemmas as IMF chief

Christine Lagarde named IMF head

French finance minister, who succeeds Dominique Strauss-Kahn, becomes first woman to hold top IMF job
    Christine Lagarde
    Christine Lagarde said she was 'honoured and delighted' to become the new head of the IMF. Photograph: Georges Gobet/AFP/Getty Images
    French finance minister Christine Lagarde has become the new head of the IMF after the fund's board confirmed her appointment following a meeting in Washington. Lagarde, who takes over from Dominique Strauss-Kahn, is the first woman to hold the post. She will begin her five-year term on 5 July. After the board's announcement, Lagarde tweeted: "The results are in: I am honored & delighted that the Board has entrusted me with the position of MD of the IMF!" Official confirmation came after the US had officially endorsed Lagarde's candidacy. Treasury secretary Tim Geithner said: "Minister Lagarde's exceptional talent and broad experience will provide invaluable leadership for this indispensable institution at a critical time for the global economy. We are encouraged by the broad support she has secured among the fund's membership, including from the emerging economies." French president Nicolas Sarkozy was quick to show his support for his compatriot. He said in a statement: "The French presidency rejoices that a woman is taking on this important international role." Lagarde has the support of most European countries, and is seen as an ideal candidate to handle the IMF's ongoing bailout of weak eurozone countries. Many observers felt the time had come for a non-European to take the post, but despite initial coolness towards her candidacy China and Russia backed Lagarde's appointment. Along with the US, she has the explicit support of nations including Indonesia and Egypt, representing more than half the IMF's 24 voting board members. The executive board represents the 187 members of the IMF. Russian finance minister Alexei Kudrin told the ITAR-TASS news agency: "I think that she has all the necessary qualities and we will support her candidacy. She will be able to make this key international organisation more dynamic, and ensure its future reform." Her closest competitor, Mexican central banker Agustín Carstens, won endorsements from Mexico, Canada and Australia, which together represent 12% of IMF board seats. Geithner commended Carstens "on his strong and very credible candidacy." Lagarde's appointment caps a tumultuous period for the IMF, currently led by Strauss-Kahn's deputy John Lipsky, who was planning to retire before Strauss-Kahn's arrest. "I am well aware that recent events have left open wounds," Lagarde said in a statement to the IMF. "I know that John [Lipsky's] departure, coming as it does at the very worst of times, will leave a big hole. The incoming MD must take pains to show the outside world that this great institution is not only leading in terms of expertise, but also in terms of integrity and work ethics." Emerging market countries initially fought hard to have one of their own claim the top IMF job. The IMF has been headed by a European since is creation at the end of second world war. But with Europe in crisis the French minister emerged as the clear favourite. Lagarde, 55, led the Chicago-based law firm Baker & McKenzie before entering French politics in 2005. She is the first woman to head the IMF.read more.

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