PARIS—France's Finance Minister Christine Lagarde is preparing a global tour including stops in China, Brazil and India to rally support for her bid to run the International Monetary Fund, and is starting to lay out her agenda—including making the fund a more legitimate representative of emerging countries. In an interview at her Paris office, Ms. Lagarde rebuffed some of the concerns that have emerged about her candidacy, which she officially unveiled on Wednesday but has been preparing for several weeks. Among them: Whether a European should lead an institution that has been trying to better represent emerging nations, even while a top global economic priority is containing Europe's own debt crisis. At a summit of Group of Eight leaders in Deauville, France, Mr. Sarkozy praised Ms. Lagarde on Thursday and appeared to underscore broad support for her from other countries. "From what I have heard, everyone thinks Christine Lagarde is a woman with many qualities," Mr. Sarkozy said, adding that leaders discussed the succession issue on the sidelines there. The U.S. has been careful not to show its hand, but Secretary of State Hillary Clinton said Thursday that "unofficially," the country supports women in top jobs to head big organizations.
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Friday, May 27, 2011
PARIS—France's Finance Minister Christine Lagarde is preparing a global tour including stops in China, Brazil and India to rally support for her bid to run the International Monetary Fund, and is starting to lay out her agenda—including making the fund a more legitimate representative of emerging countries. In an interview at her Paris office, Ms. Lagarde rebuffed some of the concerns that have emerged about her candidacy, which she officially unveiled on Wednesday but has been preparing for several weeks. Among them: Whether a European should lead an institution that has been trying to better represent emerging nations, even while a top global economic priority is containing Europe's own debt crisis. At a summit of Group of Eight leaders in Deauville, France, Mr. Sarkozy praised Ms. Lagarde on Thursday and appeared to underscore broad support for her from other countries. "From what I have heard, everyone thinks Christine Lagarde is a woman with many qualities," Mr. Sarkozy said, adding that leaders discussed the succession issue on the sidelines there. The U.S. has been careful not to show its hand, but Secretary of State Hillary Clinton said Thursday that "unofficially," the country supports women in top jobs to head big organizations.
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» The American government reaped a small profit from the first sale of its shares in American International Group since bailing out the insurer in 2008. The Treasury sold 200m shares and AIG a further 100m in the offering, which was priced at $29 a share, just above the Treasury's break-even point of $28.73. It hopes to sell the remainder of its stake, now reduced to around 77%, over the next two years.
Standard & Poor's lowered its credit outlook for Italy from stable to negative. The main Italian stockmarket swooned.
» The Spanish government signalled that it planned to go ahead with a plan to privatise the national lottery, which would create the world's biggest listed gambling company. The sale of 30% of the company that runs the lottery could fetch up to €7.5 billion ($10.6 billion) and go towards reducing Spain's debt pile.
Not exactly Europe’s moment
Moreover, the case against appointing a euro-zone finance minister as head of the IMF now is overwhelming. The main issue facing the fund is the euro zone. The fund is supposed to be an impartial arbiter of good economic policy. It is the only organisation likely to force a rethink of the euro zone’s failed strategy towards Greece, Ireland and Portugal. There were already fears that Mr Strauss-Kahn’s presidential ambitions led the fund to be too soft on Europe. Ms Lagarde has played a central role in forming the euro zone’s response to its debt crisis, and whatever her private views, she has a public record of defending the indefensible. Staggeringly, some Europeans have tried to argue that only one of their own can understand their continent’s complex politics; imagine the laughter if somebody had made the same argument for Argentina’s finance minister in the 1980s or Thailand’s in 1997.
Besides, there are people who could do the job well who do not happen to be euro-zone finance ministers. Stanley Fischer, the governor of Israel’s central bank and former number two at the IMF, has vast experience of international economics and financial crises. AgustÃn Carstens, head of Mexico’s central bank and also a former official at the fund, is another safe pair of hands. Tharman Shanmugaratnam, Singapore’s finance minister and head of the IMF’s policy advisory committee, is widely admired for his technical and political skills. Among central banker types, Mark Carney (currently at the Bank of Canada) and Arminio Fraga (formerly president of Brazil’s outfit) have stood out. Admittedly, none of these men is perfect: Mr Fischer, for instance, is too old under existing rules and had a patchy record as deputy head of the fund. But none of them is as compromised as Ms Lagarde.
It is still not too late for emerging economies to unite around a different candidate, and for America to support their choice. Europe’s monopoly of the IMF’s leadership has long been an anomaly. It is time that it ended.
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