French Finance Minister Christine Lagarde’s candidacy for IMF managing director gained momentum in Europe on Sunday, while Mexico put forward its own candidate, ensuring competition for the top job.
The Mexican finance ministry said it would nominate central bank Governor Agustin Carstens, placing a prominent emerging market name into the race to lead the global lender.
The IMF has promised a merit-based process to replace its former managing director, Dominique Strauss-Kahn, who is under house arrest in New York on charges he attempted to rape a hotel maid.
Photo: Reuters
However, Europeans have held the top IMF job since its creation in 1945 and Lagarde is widely considered the front-runner.
French Interior Minister Claude Gueant, a top adviser to French President Nicolas Sarkozy, said on Sunday that Lagarde would make an excellent head of the Washington-based lender.
“And besides, many countries support her,” he told Europe 1 radio, becoming the first member of France’s Cabinet to openly tout her credentials.
Germany and, Britain have also signaled they would line up behind Lagarde, who has experience managing the eurozone debt crisis the IMF is now focused on.
Strauss-Kahn, a leading contender for the French presidency until his May 15 detention on sexual assault charges, spent his second day out on bail under electronic monitoring and armed guard at a temporary apartment in lower Manhattan.
His resignation has opened a tug-of-war between Europe and emerging economies, which argue it is time to end 65 years of European domination of the post.
In Mexico, the finance ministry said that Carstens “has the abilities and qualifications needed to lead an institution of the relevance of the International Monetary Fund.”
He was a deputy IMF managing director before joining Mexican President Felipe Calderon’s administration in 2006 and headed the Banco de Mexico from January last year.
The finance ministers of Australia and South Africa also said on Sunday that the tradition of the IMF leadership going to Europe was out of date, calling on G20 nations to honor a pledge they made two years ago for an open selection.
European powers have started to close ranks behind Lagarde as their regional pick, saying it was crucial the next managing director has knowledge of Europe.
UK Chancellor of the Exchequer George Osborne said on Saturday Lagarde, a 55-year-old former lawyer, was an “outstanding candidate” and German Chancellor Angela Merkel called her an experienced “figure of excellent standing.”
With the support of Europe’s three-largest economies appearing to secure her the region’s nomination, Lagarde may only need to secure the backing of the US to ensure she gets the IMF post.
Leaders from the G8 rich nations are expected to discuss a replacement for Strauss-Kahn at a summit this week in the French coastal resort of Deauville, but it was not yet clear if they would make any formal announcement.
The biggest obstacle to Lagarde’s prospects could come from a legal investigation into her decision to settle a dispute between the state and a businessman and friend of Sarkozy, who won a payoff of 285 million euros (US$401 million).
A panel of judges are expected to decide by the middle of next month whether to launch a formal investigation into the case, ahead of the IMF appointment which is expected by June 30.
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