Tuesday 26 September 2017

US finance chief fails to endorse Lagarde for top IMF job

US treasury secretary Timothy Geithner. Photo: Getty Images
US treasury secretary Timothy Geithner. Photo: Getty Images
France's Finance Minister Christine Lagarde arrives for a press conference to announce her candidacy to head the IMF on Thursday. Photo: Getty Images

Independent.ie reporters

The US treasury secretary Timothy Geithner has stopped short of endorsing Christine Lagarde’s qualifications to head up the International Monetary Fund (IMF) but praised her qualifications.

He said Ms Lagarde, who confirmed her bid yesterday: “is an exceptionally capable person, an excellent mix of financial economic knowledge, talent and the kind of political skill you need to navigate this context,”

Timothy Geithner also said a second candidate, Mexican central bank governor Agustin Carstens, is also “very talented.”

Ms Lagarde would succeed the now disgraced Dominique Strauss-Kahn and become the first woman to lead the Washington-based lender to nations since its founding in 1945.

She now has the backing of Europe’s main economies, including Ireland and, according to her government, China.

France’s negative attitude towards Ireland’s debt and our 12.5pc low corporation tax rate has raised questions as to whether she would be sympathetic to our attempts to clean up the mess.

But some believe she will have to don an IMF hat if she gets the job and move away the opinions of president Nicolas Sarkozy.

Nobel-prize winning economist Robert Mundell said Ms Lagarde could help repair the damage done to the IMF by the arrest of Mr Strauss-Kahn on charges of sexual assault and attempted rape.

“She’s made a tremendous impression,” Mr Mundell, a member of the faculty at Columbia University and an adviser to the IMF, said in an interview.

“What the IMF needs right now, in backing up from the fiasco recently, is someone who can lead strongly.”

Mr Carstens, a former IMF deputy managing director, remains the Mexican government’s choice for the IMF even after Mr Lagarde announced her candidacy, Mexican Finance Minister Ernesto Cordero said.

“They are both strong, credible candidates,” Mr Cordero added. “We agreed that what the IMF needs is an open, transparent, merit-based process.”

The IMF executive directors representing Brazil, Russia, India, China and South Africa have protested the presumption that the fund’s next chief once again be a European while failing to unite around an alternative to Ms Lagarde.

By tradition, the head of the IMF has always been a European, while the World Bank president has been a US citizen. Countries from the European Union hold about 31pc of the votes at the agency and the US almost 17pc.

A lawyer who practiced in the US before entering French government in 2005, Ms Lagarde would bring frontline experience of the sovereign-debt crisis as Greece’s debt woes threaten to spark another round of contagion across the euro region.

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