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Friday 20 January 2017

Ailish O’Hora: Don't condemn Lagarde even before she gets the IMF job

Ailish O’Hora

Published 25/05/2011 | 11:32

All this talk on whether or not French Finance Minister Christine Lagarde will be a "friend" to Ireland as new head of the International Monetary Fund (IMF) and whether the Government should support her nomination for the job is frankly, academic.

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The role is almost certainly hers.

It’s well documented that, France, especially president Nicolas Sarkozy, has been critical of Ireland’s performance post the financial crisis and particularly outspoken against our low corporation tax of 12.5pc.

But a lot of that is posturing ahead of the up-coming French presidential elections, and Ms Lagarde was unlikely to speak out against Mr Sarkozy’s position - no matter what her personal views on our corporation tax are.

The reality is that if Ms Lagarde succeeds in taking over at the IMF helm from disgraced former leader Dominique Strauss Kahn, she will have no choice but to don an IMF hat and move away from France’s current hawkish stance on us.

The IMF is an international agency charged with moving crisis-stricken countries, like ourselves, out of the mire.

Her personal opinions on issues like corporation tax will have to be put on the back burner.

Don’t forget, the IMF, under the now-disgraced Dominique Strauss Kahn, has been obviously supportive of our attempts to rein in our finances.

It is also charging us lower interest rates than the European Central Bank or the European Commission on the €67.5bn loan from the so-called “trioka.”

A changing of the guard is unlikely to change that stance overnight and Ms Lagarde has already cemented support from a number of European countries and the IMF.

In addition, Ms Lagarde is someone who has been acutely aware of our current economic position from day one - it was she who received the call on that fateful morning in September 2008 after the previous Finance Minister Brian Lenihan introduced the bank guarantee.

(Mr Lenihan famously bragged on the BBC documentary “The love of money” that he told Ms Largarde about the guarantee in French!)

The role of IMF chief has traditionally gone to a European country and that precedent is more important now than ever.

Whoever gets the job must have a firm understanding of the European crisis, particularly the situation in countries like Ireland, Greece and Portugal, and Ms Lagarde is more qualified than many for that role.

The vacuum left by Mr Strauss Kahn’s departure has caused all kinds of problems including a slump in the euro and the sooner the role is filled, the better.

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