FRENCH FINANCE minister Christine Lagarde has emerged as the clear favourite to take the helm of the International Monetary Fund (IMF), with European leaders expected to agree on her nomination in the coming days.
President Nicolas Sarkozy is understood to be pressing for Ms Lagarde to succeed her compatriot Dominique Strauss-Kahn after he resigned this week to fight charges of sexual assault and attempted rape in New York. Mr Sarkozy spoke to British prime minister David Cameron yesterday and with German chancellor Angela Merkel earlier this week.
European leaders are resisting pressure to give the job to an emerging economic power and the expectation in European circles is that they will coalesce around a single candidate before a G8 summit in Deauville, France, on Thursday and Friday. Ms Lagarde received a public endorsement yesterday from Italian prime minister Silvio Berlusconi, while the president of the euro group, Jean-Claude Juncker, who played a vital role in Mr Strauss-Kahn’s nomination in 2007, said she would be the “ideal candidate”.
Countries such as China and Brazil want an immediate end to the tradition where a European has led the IMF since creation in 1945 and an American leads the World Bank. With the fund playing a central role in the euro-zone crisis, the Europeans are keen to retain control of its leadership. European Council president Herman Van Rompuy called for a quick decision and said the tradition of European leadership “could be changed, but not now”.
Sources suggested discussions about the IMF succession had been taking place discreetly even before Mr Strauss-Kahn’s resignation on Wednesday.
Before his arrest, he was widely expected to step down next month to contest the French socialist party’s presidential primary.
Ms Lagarde’s chances appeared strengthened yesterday when Dr Merkel told a news conference in Berlin: “Among the names mentioned for the IMF succession is French minister Christine Lagarde, whom I rate highly.” There remains uncertainty, however, over whether Ms Lagarde could be appointed before a French court decides next month if she should be investigated over a decision she took as minister.
A public prosecutor has recommended she be investigated for allegedly overstepping her authority by pushing through a €285 million arbitration settlement with businessman and ex-minister Bernard Tapie. She denies wrongdoing and says she is victim of a smear campaign. A court is due to decide next month if a full investigation is needed.
While US treasury secretary Timothy Geithner called for an “open process that leads to a prompt succession”, European sources believe President Barack Obama will not veto a European candidate as he will need European support to ensure a US nominee succeeds Mr Strauss-Kahn’s deputy – American John Lipsky – when he stands down in summer.
The US and Europe jointly hold more than half of the IMF’s votes, giving them enough power to decide who leads it.