France may have to rely on Christine Lagarde’s track record as a euro crisis fighter if she’s to become the International Monetary Fund’s first female chief after the resignation of her compatriot Dominique Strauss-Kahn.
Lagarde, 55, has the negotiating skills and an understanding of Europe’s sovereign-debt crisis needed for the post, say analysts including Charles Grant at the Centre for European Reform. IMF shareholders will assess if those qualities are enough to allow France to keep the job for itself after securing four out of the 10 managing directors since 1946.
“We should choose the best candidate, whether European, Antarctican or Uruguayan,” said Grant, executive director of the London-based research group. “The French have a record of strong candidates and the obvious one now would be Lagarde.”
The next IMF chief will be at the center of debates on determining a course for the euro region out of the sovereign debt crisis that still threatens to push the likes of Greece, Ireland and Portugal into default. Strauss-Kahn’s successor will also have to restore the Washington-based fund’s image after the former French finance minister was forced to quit today after being charged with attempted rape and other offenses in New York.
Strauss-Kahn, 62, finance minister from June 1997 to November 1999, was arrested May 14 on sexual-assault charges and is currently detained at Rikers Island prison in New York. He denies the allegations.
Jockeying for Strauss-Kahn’s succession has already begun. European officials have closed ranks to defend their region’s 65-year hold over the top job of the fund, which has never had a female chief. Finance ministers from Sweden to Spain say the region needs one of its own to get a handle on its debt crisis.
“Christine Lagarde has outstanding credentials,” Swedish Finance Minister Anders Borg said today in an interview with Bloomberg Television. “She has a lot of experience in these matters.” Borg also said the IMF may benefit from having a woman at the helm. “The fact that half of the world has not been represented as managing director” gives Lagarde’s candidacy an additional “advantage.”
Lagarde declined to address her own candidacy today, telling reporters in Paris that the next IMF chief should come from Europe.
“Any candidate needs to come from among the Europeans,” she said.
Lagarde is among those with the “truly extraordinary profile” needed for the IMF job, especially for Europeans, said Jacob Kirkegaard of the Peterson Institute in Washington. She may be “brought into play not as a northern European candidate but as the first female head.”
A lawyer who became the first female chairman of Chicago-based firm Baker & McKenzie LLP, Lagarde was appointed as finance minister by French President Nicolas Sarkozy in 2007, just before the onset of the financial crisis.
Lagarde’s negotiating abilities helped clinch agreement on the euro area’s sovereign bailout fund announced in the early hours of May 10 last year, according to a person who was there. The 16-member group’s finance ministers worked through the night to create a 750 billion-euro fund ($1.07 trillion) to support financially distressed governments and hold the bloc together.
A fluent speaker of English, Lagarde attended a year of high school as an exchange student at Holton Arms, a private girls’ school in Bethesda, Maryland. An avid swimmer, she was selected for the French national synchronized swim team when she was 15 and competed internationally for two years.
Lagarde is the favorite for the job, according to odds at London-based bookmaker William Hill Plc said today. It is offering six pounds ($9.71) for every four bet that Lagarde will be the next IMF head, down from odds of 20-1 previously.
Lagarde still faces legal challenges of her own that could overshadow any candidacy. Jean-Louis Nadal, the public prosecutor attached to France’s highest appeals court, this month requested a judicial inquiry into whether she abused powers in reaching a settlement with businessman Bernard Tapie. Lagarde says the allegations are without foundation.
Her potential candidacy faces opposition from nations including South Africa and Russia. Trevor Manuel, head of South Africa’s National Planning Commission, is “highly respected in the world,” Finance Minister Pravin Gordhan said in Pretoria yesterday. Russian central bank Deputy Chairman Sergei Shvetsov said a developing country should be given the chance to run the IMF to better reflect their role in global trade.
“For a long time people have been saying there have been a disproportionate number of Frenchmen at the top of international organizations,” said John Llewellyn, a researcher at Chatham House in London and a former official at the Paris-based Organization for Economic Cooperation and Development.
Former U.K. Chancellor of the Exchequer Alistair Darling, Bank of Canada Governor Mark Carney and Kemal Dervis, an ex-Turkish economics minister, would be other possible candidates, economists said.
Emerging nations have nevertheless failed to indicate they will rally behind one candidate. That may leave the way open for Europe to get a lock on the position again.
“The way should be open to everybody,” said Uri Dadush, director of international economics at the Carnegie Endowment for International Peace in Washington. Still, “Christine Lagarde would be also an outstanding candidate. She should be put up on her own merits and may even prevail.”