FRENCH MINISTER TO SEEK TOP I.M.F. JOB
Declaring her candidacy at a news conference that was known as only the night just before, Ms. Lagarde said that becoming European ought to not disqualify her and that she would be traveling over the next few weeks to listen to and seek support from other I.M.F. members.
“Being a European shouldn’t necessarily be a plus, but it shouldn’t be a minus, either,” she stated.
Given that Europe’s festering sovereign debt crisis is the greatest issue facing the fund — a reason cited by European leaders for wanting to hold on to the post for now — Ms. Lagarde said her intimate knowledge of the problems and the players involved can help.
Ms. Lagarde has a prominent profile in France, Europe and in the world of international finance. She has played an critical role in managing the euro crisis at a pivotal point in its history. Moving to the I.M.F. would elevate her greater on the global stage.
She already has support from Chancellor Angela Merkel of Germany the British chancellor of the exchequer, George Osborne and most of Europe’s political establishment. That created her the front-runner to succeed Dominique Strauss-Kahn, who resigned last week to fight charges that he sexually assaulted a maid in a New York hotel.
At the news conference, Ms. Lagarde created clear that she wants a full five-year term and is not looking for to just finish out the remaining 18 months of Mr. Strauss-Kahn’s term. Tanned and smiling, she also stated that she had spoken with her principal rival, the Mexican central bank governor, Agustín Carstens, two days ago and that “we are happy with the competition.”
Still, the selection procedure for the job has drawn increasing criticism from leaders of large emerging countries, who are gaining influence in the world as debt crises and economic downturns plague Western countries.
Late Tuesday in Washington, the I.M.F. representatives from Brazil, Russia, India, China and South Africa issued a firmly worded statement condemning the “obsolete, unwritten convention” of reserving the leading job for a European, saying that generating a selection on the basis of nationality “undermines the legitimacy of the fund.”
The statement stopped well short of rejecting Ms. Lagarde’s candidacy but said technical background and political acumen, rather than nationality, should be the main aspects in picking future managing directors.
It also underscored what has become in increasingly typical refrain among emerging market nations: that the gradual shift in economic and demographic influence to rapidly creating countries ought to be reflected in international institutions.
“Adequate representation of emerging market and developing members in the fund’s management is critical to its legitimacy and effectiveness,” the group’s statement said.
However in the absence of any consensus among emerging market nations on a candidate from their ranks, there appeared to be small to indicate that a bid by Ms. Lagarde would be derailed.
Arvind Virmani, who represents India and 3 other countries on the I.M.F. board, told Bloomberg News that it was unlikely that a candidate from an emerging market would be able to beat her. “There is no indication which suggests that the result will be any distinct this time,” he said.
But one factor that could throw a shadow on her candidacy involves her role in getting a case involving a supporter of President Nicolas Sarkozy sent to arbitration. Ms. Lagarde was peppered with questions during the press conference about whether or not she abused her authority in a case that resulted in a lucrative arbitration award to a French businessman, Bernard Tapie, in 2007.
French judges have until June 10 to decide no matter whether to investigate the charges. Ms. Lagarde said she would maintain her candidacy even if judges decided to open an official inquiry.
“I have a perfectly clear conscience, and I operated with total respect for the law,” she stated.
Bettina Wassener contributed reporting from Hong Kong.