The International Monetary Fund on Tuesday chose French finance minister Christine Lagarde to be its next managing director, maintaining Europe’s long-standing hold on the agency’s top job and appointing the first woman to take over the global financial powerhouse.
In a release, the fund’s 24-member executive board said it had chosen Lagarde “by consensus” over Mexican central bank governor Agustin Carstens.
Lagarde, 55, a lawyer well-regarded for her political acumen, takes over an agency at the center of crisis discussions in Greece. It needs “healing” internally as well, Lagarde said in her public statement to the board, after the arrest of former managing director Dominique Strauss-Kahn on sexual assault charges in New York.
Her five-year term will begin July 5.
Any remaining mystery in the campaign to run the agency ended on Tuesday morning when the United States announced it would back Lagarde’s bid, breaking the Obama administration’s silence on the freighted decision just as the IMF board prepared to meet.
A former chairman of the Baker & McKenzie law firm, Lagarde will take over a global institution that is playing an increasingly central role in managing the world economic crisis, with tens of billions of dollars in loans outstanding and supporting credit lines available to keep countries out of trouble.
Lagarde played a central role in crafting an initial round of plans to help Greece as a representative of the French government. She’ll now be renegotiating much of that as head of the IMF.
In her statement to the board, released publicly, she assured members that she would not be an easy touch for European nations that need help. France shares the euro currency with Greece and other troubled European economies that are under the IMF’s watch, and its banks and other major institutions have a direct interest in the outcome of ongoing crisis talks.
“If elected, I will have but one thing in mind when it comes to providing support to a euro-area member: ensuring full consistency with the Fund’s mission and providing for good stewardship of the Fund’s resources,” Lagarde said. “I will not shrink from the necessary candor and toughness in my discussions with the European leaders, on the contrary.”
She also noted the “open wounds” left at the agency following Dominique Strauss-Kahn’s arrest on sexual assault charges, and said that the IMF must now prove it “is not only leading in terms of expertise, but also in terms of integrity and work ethics. We must consolidate and, if needed, restore staff pride in working at the IMF, to get us through the healing process.”
The United States is responsible for more than 17 percent of the roughly $320 billion kitty that runs the International Monetary Fund, and has by far the largest vote on the fund’s board.
Although the United States usually is not shy about exercising its influence, U.S. officials had maintained a studied silence about who they believed should replace Strauss-Kahn, apparently hesitant to weigh in on a global debate about whether the fund should be led by a banker from a non-European country.
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