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Lagarde kicks off IMF campaign in Brazil

May 30 2011 18:18
Brasilia - French Finance Minister Christine Lagarde arrived in Brazil on Monday seeking to win support from one of the most influential emerging economies for her bid to lead the International Monetary Fund (IMF).

The backing of Latin America's largest economy, which appears likely, could help turn the tide in favor of Lagarde's candidacy among developing countries and ease discontent over the practice of choosing a European to head the global lender.

Lagarde's visit to Brasilia is the first in a hastily arranged global tour that will take her to India, China, Russia and Saudi Arabia as she competes with Mexican central bank chief Agustin Carstens, the only other declared candidate.

"I'm coming here, obviously, to explain my candidacy ... and I'm also here to listen to what the Brazilian authorities expect from the fund and from the managing director," Lagarde said on her arrival.

The resignation of Dominique Strauss-Kahn, who stepped down as the IMF managing director to defend himself against sexual assault charges including attempted rape, has led to calls from developing countries to end the traditional European lock on the job.

EU nations are strongly backing Lagarde, arguing that a European leader is crucial at a time when the IMF is working with the eurozone to avert the risk of Greece defaulting on its loans and sparking wider financial fallout.

Finance Minister Pravin Gordhan on Monday criticised the rich nation support for Lagarde, saying it breached a decision by the G20 group of leading economies for a more open selection process.

Brazilian Finance Minister Guido Mantega said this month that the next IMF leader should be chosen on merit rather than nationality and that the rise in influence of emerging economies needed to be recognised in the process.

Brazil has not officially sided with either candidate but government officials say in private that the administration of President Dilma Rousseff is inclined to back Lagarde as long as she pledges to support reforms that would give emerging economies more say in IMF decision-making.

They say she is seen as having more clout to achieve changes at the IMF than Carstens, who arrives in Brazil on Wednesday to push his candidacy. The IMF's board has a June 30 deadline for picking a successor.

Mexico and Brazil have maintained relatively cool ties in recent years and have occasionally vied for economic and political leadership in Latin America.

Lagarde, who has the support of the Group of 8 leading economic powers, is regarded as the strong favorite to win the top IMF job. Her main obstacle is the possibility of an inquiry into her role in a 2008 legal settlement involving paying XX285m euros to businessman Bernard Tapie, an ally of French President Nicolas Sarkozy.

She will have lunch with Mantega and meet central bank chief Alexandre Tombini before giving a news conference.

Neither IMF candidate is expected to meet with Rousseff, who has maintained a lower profile than her outspoken predecessor Luiz Inacio Lula da Silva.


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