"Old Europe" Backs French Finance Minister Lagarde for IMF Head

Michael Collins

The Financial Times reported that French Finance minister Christine Lagarde was the leading candidate for Managing Director of the International Monetary Fund (IMF). She would replace Dominique Strauss-Kahn, now charged with sexual assault in New York City. (Images: Wiki Commons)

Christine Lagarde, France’s finance minister, has emerged as the leading contender to run the International Monetary Fund after being strongly endorsed by her German and British counterparts, eager to extend Europe’s 65-year grip on the global financial institution. Financial Times May 22

With the UK, Germany, and France supporting Lagarde, a favorable nod from the Obama Administration would assure her the job.

Since its creation in 1945, IMF has had an unbroken string of European managing directors.

The fund describes its role in the global economy:

The IMF promotes international monetary cooperation and exchange rate stability, facilitates the balanced growth of international trade, and provides resources to help members in balance of payments difficulties or to assist with poverty reduction. IMF

Critics have another view:

The World Bank and the IMF often attach loan conditionalities based on what is termed the ‘Washington Consensus’, focusing on liberalisation—of trade, investment and the financial sector—, deregulation and privatisation of nationalised industries. Often the conditionalities are attached without due regard for the borrower countries’ individual circumstances..." The Bretton Woods Project

Reuters noted that Strauss-Kahn's resignation, "has started a tug of war between Europe and emerging economies, which argue it is time to end 65 years of European domination of the IMF post." Australia and South Africa said it's time to hire by qualification not geography.

The Mexican government put forward Bank of Mexico governor and economic consultant Augustin Carstens. Carstens worked with IMF after receiving his PhD in economics from the University of Chicago, where he served on the faculty for a period.

European Conservatives Put Up Candidate Under Scrutiny

French President Nicolas Sarkozy nominated for Lagarde the IMF post. The president has a 71% disapproval rating in a recent 1800 person poll. One of the many factors contributing to that broad based rejection by the French public involves Lagarde. As finance minister in 2007, she moved a court case involving a close associate of Sarkozy into binding arbitration. That resulted in a $400 million judgement for the president's friend, an outcome that many thought was excessive.

Other politicians questioned Sarkozy's friendship with Tapie. Daniel Cohn-Bendit, Joly's fellow MEP for the green party, Europe Ecologie Les Verts, told French TV, "What I know is that Lagarde's decision was pushed by Nicolas Sarkozy. It's Sarkozy's responsibility and his friendship with Bernard Tapie that's under discussion here." Guardian May 11

A three judge panel of the Court of Justice for the Republic will recommend for or against further investigation by mid June. A yes on investigating Lagarde would end her chances for the IMF position.

The nomination is backed by three conservative governments: prime minister David Cameron, United Kingdom; France's president Sarkozy; and conservative-lite German Chancellor Angela Merkel. Cameron's popularity is up and down, Sarkozy's is disastrous, and Merkel's Christian Democratic Party just lost a major state election to the Green Party.

This may be the last good opportunity for Europe's conservatives to deliver for their corporate and banking patrons. One has to wonder why they couldn't find a scandal free candidate.

If the European move fails, the alternative, Carstens, comes from a "free market" Mexican government that features the austerity and privatization policies of their European counterparts.

Plus ça change, plus c'est la même chose


Also see: IMF Rates Up Dictatorships Just Before Revolutions By Michael Collins, March 3

This article may be reproduced entirely or in part with attribution of authorship and a link to the article.

Subject Meta: 

Forum Categories: 

yeah but

Mexico? If we're going by politics of regions that sounds like frying pan to fire, assuming they will be up to whatever their nation-state's agenda is. i.e. illegal cheap labor and Drug Cartels?

Although good point if the IMF is supposed to be international, which it's not. But who wants this body running the globe anyway?

Sarkozy still loses election, even with DSK out of picture

(Reuters, May 24) - Nicolas Sarkozy would be beaten by either of the two French Socialists expected to run for president in 2012 after the fall of Dominique Strauss-Kahn, the earlier favourite, according to a poll published on Tuesday.

The poll, conducted after former IMF chief Strauss-Kahn was arrested in New York on attempted rape charges which he denies, shows Sarkozy losing by a sizeable margin to either of the likely left-wing challengers -- Francois Hollande or Martine Aubry.

The two frontrunners for the "Socialist" nomination crush Sarkozy.  Martine Aubry wins 59%-41% and Francois Hollande wins 62% to 38%.

Note on French Socialist party.  The fact that Strauss-Kahn, head of the IMF, was the leading candidate for the Socialists tells you all you need to know about the socialism in that party.


Lagarde Investigation - Possible Outcomes - June 10th or so

"Although Lagarde has the support of France, Germany and Britain, her possible candidacy is dogged by accusations that she exceeded her authority by cutting short a legal battle between French tycoon Bernard Tapie, and a formerly state-owned bank, sending both parties into binding arbitration.

"The arbitration panel decided to award Tapie, a supporter of Lagarde's boss President Nicolas Sarkozy, 385 million euros in the case, linked to the bank's alleged mishandling of the entrepreneur's sale of the Adidas sportswear firm.

"TThe court could give one of three decisions on 10 June: it could throw out the case, it could ask for more information, or it could order an enquiry which in turn could see Lagarde charged with a criminal offence."

RFI, May 24

More on the makeup and independence of this court later tonight.