Paris - France's finance minister entered the race on
Wednesday to head the International Monetary Fund and succeed the fallen
Dominique Strauss-Kahn, despite anger in big emerging economies over Europe’s
“obsolete” lock on the job.
Christine Lagarde announced her candidacy on the eve of a
Group of EIght (G8) summit of industrialised countries in Deauville, France, after
securing the unanimous backing of the 27-nation European Union and, diplomats
said, support from the United States and China.
"It is an immense challenge which I approach with
humility and in the hope of achieving the broadest possible consensus,"
Lagarde told a Paris news conference, saying she planned to travel widely in
the coming weeks to consult other member states.
The 55-year-old centre-right politician, a former corporate
lawyer who speaks fluent English, has won plaudits for her deft chairing of
the G20 finance ministers and communication skills.
But unlike Strauss-Kahn, who resigned last week after being
charged with the attempted rape of a hotel maid in New York, she is not an
economist and may struggle to match his thought leadership over the management
of the world economy.
Brazil, Russia, India, China and South Africa (Brics)
sharply criticised EU officials in a joint statement for suggesting the next
IMF head should be a European, a convention that dates back to the founding of
the global lender at the end of the Second World War.
However, the Brics countries failed to unite
behind a common alternative candidate, leaving the way clear for Lagarde unless
she slips on a French legal case.
Diplomats said their complaint was mostly aimed at securing
a commitment from developed countries that nationality will no longer be a
covert criterion for selecting future IMF chiefs.
In a nod to the emerging nations’ concerns, Lagarde said she
would work for “greater representativity and greater flexibility” at the IMF if
she were elected.
Brics aggrieved
In the first joint statement issued by their directors at
the Fund, the Brics said the choice of who heads the IMF should be based on
competence, not nationality.
They called for “abandoning the obsolete unwritten
convention that requires that the head of the IMF be necessarily from Europe”.
Hours before the statement was issued in Washington,
France’s government said China would back Lagarde. The Chinese foreign ministry
declined comment.
Some emerging market government officials say privately that
although they are fed-up with advanced economies controlling the selection
process, they are not in a position to put forward a challenger who could stand
up to Lagarde.
Mexico has nominated its central bank chief for the job and
he said some countries had welcomed his decision to run. South Africa and
Kazakhstan may put forward their own candidates.
Under a long-standing agreement between the United States
and Europe, the top job at the IMF goes to a European while an American leads
its sister organisation, the World Bank. The United States also fills the
number two position at the IMF.
European diplomats said Washington had asked the French
government about a pending legal case in which a prosecutor has recommended
that Lagarde be placed under investigation for allegedly abusing her authority.
The Court of Justice of the Republic, a special court
created to try ministers for alleged offences committed while in office, will
rule on June 10 whether to investigate her over a disputed arbitration
settlement with businessman Bernard Tapie, a convicted former minister who backed
President Nicolas Sarkozy.
French officials have told other governments privately the case will not be a show stopper, the diplomats said.
Following Strauss-Kahn’s resignation, Europe has made clear it wants to stay in charge of the multilateral lender at a time when it is helping to bail out Greece, Ireland and Portugal.
US backs European candidate
The EU and the United States, which sources in Washington
have said will back a European, have enough joint voting power to decide who
leads the IMF. However, securing support from some emerging economies would defuse a
potentially bitter row over the decision.
In April 2009, the Group of 20 (G20) leading nations endorsed “an
open, transparent and merit-based selection process” for heads of the global
institutions.
France, which presides over the G20 this year, has made an
effort to work with Beijing on key issues for developing nations, such as global
monetary reform and commodity market speculation.
Last week the head of China’s central bank, Zhou Xiaochuan,
said the IMF’s leadership should reflect the growing stature of emerging
economies. But he stopped short of saying its new boss should be from an
emerging economy.
Wu Qing, a researcher with the Development Research Centre
government think tank in Beijing, said it was plausible that China would
support Lagarde as there weren’t many qualified candidates from China or Asia
in general.
The IMF’s board will draw up a shortlist of three candidates
and has a June 30 deadline for picking a successor. Nominations can be made
until June 10. Mexico’s central bank chief, Agustin Carstens, told Reuters the
United States welcomed his participation in the race for the IMF job but was
neutral on whether to support his candidacy.
“They welcomed that I was participating and they thought it
was an important part of the process,” Carstens said.
Brazil seemed reluctant to back Carstens, with government
sources saying he is seen as a long shot for the job.
South African Planning Minister Trevor Manuel may also be a candidate to run the IMF, and Russia has said it would back Kazakhstan’s central bank chief, Grigory Marchenko.