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France's finance minister launches bid for IMF leadership

French Finance Minister Christine Lagarde on Wednesday launched her bid to lead the IMF, a candidacy that would put the first woman in charge of the scandal-rocked fund .
Christine Lagarde,
France's Finance and Economy Minister Christine Lagarde is seen during the ringing of the opening bell at the Paris Euronext opening day Tuesday, May 24, 2011. Jacques Brinon / AP
/ Source: The Associated Press

French Finance Minister Christine Lagarde on Wednesday launched her bid to lead the International Monetary Fund, a candidacy that would put the first woman in charge of the scandal-rocked fund but increases tensions with developing nations who want one of their as head.

The charismatic Lagarde, who spent much of her career in the United States, emerged as the front-runner for the job even before speaking out publicly.

"If I'm elected I'll bring all my expertise as a lawyer, a minister, a manager and a woman" to the job, she said Wednesday. The IMF, which provides billions in loans to shore up the world economy, has not had a woman director since its inception in 1945.

The IMF's last managing director, Frenchman Dominique Strauss-Kahn, quit last week after he was accused of attempting to rape a New York hotel maid.

Many European countries, including Germany and Britain, have offered their backing to a Lagarde candidacy. Emerging economies have yet to rally behind a single candidate but say the job should be open to non-Europeans.

The IMF has traditionally been run by a European, while the World Bank has been run by an American.

But IMF officials representing Brazil, China, India, Russia and South Africa said in a joint statement on the eve of Lagarde's candidacy launch that they wanted to see the election of the next chief be "truly transparent" and merit-based.

"We feel it is outrageous to have the post reserved for a European," said Nogueira Batista, IMF executive director from Brazil and one of the signers of the joint statement.

However, emerging economies have yet to rally around a single candidate, even as Europe has backed Lagarde.

Jabulani Sikhakhane, spokesman for South Africa's finance ministry, said in reaction to Lagarde's candidacy that "It's not about the individual candidates or their nationality. It's about the process."

Sikhakhane noted world governments had agreed in 2009 that there should be a transparent, merit-based process for choosing leaders of global financial institutions.

The decision on the next IMF leader is expected by the end of June. It will be made by the agency's 24-member executive board, whose officials represent the 187 IMF member countries.

The United States, whose vote will be key in the ultimate decision, has not yet endorsed a candidate. Lagarde's announcement comes just before President Barack Obama comes to France for a summit of the Group of Eight industrialized nations, and may up the pressure on the U.S. to make a call then.

Lagarde indicated she would not focus exclusively on Europe, and said the choice shouldn't be based on a candidate's nationality. "No zone has been spared by the financial crisis," she said. "I want to get the biggest possible consensus for my candidacy."

Deft negotiator
Lagarde's popularity is based in part on her reputation for her deftness at international negotiations to stabilize the world economy during the world financial crisis. She also was seen as instrumental in getting the IMF and European Union to agree on rescue plans for Greece, Ireland and Portugal when their debt crises threatened the entire shared euro currency.

The 55-year-old spent headed the law firm Baker & McKenzie in Chicago before joining French politics in 2005. With excellent English, a direct manner and relatively pristine image, she is seen as a good candidate to quickly step into Strauss-Kahn's shoes and manage Europe's continuing debt difficulties as well as the myriad other challenges to the world economy.

But potential legal troubles at home have clouded her candidacy, and some French critics say she would be a bad choice.

Questions have surfaced about Lagarde's role in getting arbitration in 2008 for French businessman Bernard Tapie, who won €285 million ($449 million) as compensation for the mishandling of sale of sportswear maker Adidas. Lagarde was finance minister at the time of the decision. A decision is expected June 10 on whether to open an investigation, according to French media reports.

Lagarde said she has "total confidence" about the issue and that even if the investigation goes forward, she would maintain her candidacy.

She said the only other candidate she knows of is Mexico's finance minister. She said they have spoken and they are both happy to be competing against one another.

European Commission President Jose Manuel Barroso joined the pro-Lagarde chorus Wednesday, saying she is well-regarded in the international community and "indispensable" to helping the IMF keep the world economy stable.