As finance minister of France, Christine Lagarde has been a key figure representing her country in extended negotiations to keep the euro zone intact and keep Greece and other troubled European nations afloat with emergency loans.
Campaigning to become managing director of the International Monetary Fund, Lagarde on Thursday backed away from the question of whether she would recuse herself from those talks as IMF head. France has a direct interest in the outcome of the talks, and Lagarde would face the prospect of switching in the middle of a negotiation from being a national advocate to being the top representative of a 187-member institution.
Asked in a live Twitter chat whether she would step away from the crisis discussions over Greece, Lagarde said only that she would “fully comply with the rules of the IMF.”
The IMF does not have an explicit recusal policy but relies on a general principle outlined in its governing documents that the managing director and employees “owe their duty entirely to the fund and to no other authority. Each member of the fund shall respect the international character of this duty and shall refrain from all attempts to influence any of the staff in the discharge of these functions.”
IMF spokesman Caroline Atkinson said Thursday that IMF officials have selectively stepped away from some issues. Former managing director Dominique Strauss-Kahn did not participate in the fund’s annual review of France’s economy, for example, and the head of the fund’s European Department, Antonio Borges, did not participate in the negotiations over a recent bailout of his native Portugal.
France is an important player in the discussions regarding Greece because it is among the nations that use the euro and would help fund any crisis loans negotiated for the highly indebted country. In addition, some of its banks and other financial institutions may be at risk if Greece defaults on its bond payments.
Lagarde also deferred to IMF policy when asked if she would release a financial disclosure statement.
IMF managers — around 300 of the agency’s roughly 2,400 staff members — are required to file an annual statement of personal investments and liabilities. The document is not made public, but a independent ethics officer is supposed to review it for possible conflicts of interest.
Lagarde has won backing from major European nations, which endorsed her soon after Strauss-Kahn resigned to face sexual assault charges in New York and before it was clear who else might compete for the job. Nominations for the post close Friday, with Mexican central bank governor Agustin Carstens a declared candidate and Kazakhstan’s central bank governor, Grigori Marchenko, expected to be nominated as well.
Lagarde is considered difficult to beat given her broad European support, and she has been aggressive in pushing her public standing. During recent trips to India and China, she tweeted steadily about how those major developing countries seemed open to her candidacy — implying that Carstens was unable to secure endorsements from the set of countries whose support he would need to win.
Meetings with officials in India and China were “very productive and extremely positive, even if the public stand was a bit formal,” Lagarde said in response to a question during the Twitter chat.
Officials from both countries, large developing economies that many analysts feel are underrepresented by IMF rules that favor Europe, remained noncommittal.
The IMF board is expected to make a decision by the end of the month.