French Finance Minister Christine Lagarde’s chances of leading the IMF improved yesterday, as France claimed China would back her, even though she faces allegations of abuse of power at home.
The 55-year-old former corpor-ate lawyer, a close ally of President Nicolas Sarkozy, had not formally applied for the job, but is regarded as a frontrunner and has the backing of European heavyweights France, Britain and Germany.
This despite the fact that the last managing director of the fund, Dominique Strauss-Kahn, was also French and left under a cloud after he was arrested in New York and charged with a brutal sexual assault on a hotel maid.
The International Monetary Fund, lender of last resort for cash-strapped governments, is traditionally led by a European, but some of the world’s faster-growing emerg-ent economies were thought to have wanted to take their turn.
Nevertheless, French government spokesman François Baroin said that the largest emerging power of them all would not stand in Ms Lagarde’s way.
“The Chinese are favourable to the candidacy of Christine Lagarde,” he told Europe 1 radio, without confirming that she would be a candidate.
Asked about Mr Baroin’s statement, officials at China’s central bank declined to comment. Last week, the bank said the IMF leadership should “better represent emerging markets”, without suggesting a candidate.
“What is being drawn up is a European consensus,” Mr Baroin said.
“But you will easily understand, given the circumstances of the IMF director’s resignation, and given that it is not a point of national pride, that it is not for France to take a position first.
“We do not want to make any gesture that could be interpreted as a form of contempt for emerging countries or any sign of arrogance, given the circumstances,” he said, in a tacit nod to the shaming of Mr Strauss-Kahn.
Ms Lagarde is widely tipped as favourite – a European Union source on Friday dubbed her “practically a shoo-in” – but has not confirmed her interest.
She is not an economist but, having lived and worked for many years in New York as a corporate lawyer, she is a fluent English speaker and is respected in inter-national circles.
Before being recruited by President Sarkozy ’s centre-right government she was not seen as a politician, but she is seen in France as a free-market champion.
Asked on US news channel CNBC on Monday what she would say if offered the post, she replied: “I ’d say what an interesting question, but clearly premature. It ’s for others to decide, my dear.”
She has received enthusiastic backing in many European capitals, but some in Paris worry that a judicial investigation into a possible abuse of power in her current position could end up ruling her out.
Legal sources told AFP yesterday that judges would decide on June 10 and not before whether or not to allow the probe – which could lead to criminal charges and even a jail term – to go ahead.
This date, which coincides with the closing date for IMF candid-acies, is the next meeting of the complaints commission of the Court of Justice of the republic, charged with deciding whether serving ministers can be probed.
Ms Lagarde’s authority had been undermined by allegations she exceeded her authority by cutting short a legal battle between French tycoon Bernard Tapie and a state-owned bank and sending the parties into binding arbitration.
The arbitration panel decided to award Mr Tapie €385 million over the bank ’s alleged mishandling of his sale of the Adidas sportswear firm.