Lagarde, Carstens battle for support for IMF job

10th June 2011, Comments 0 comments

Mexico's Agustin Carstens was in India and French rival Christine Lagarde in Lisbon pitching to be the next IMF chief Friday while a South African possible bowed out, knocking Europe's hold on the job.

Nominations to lead the International Monetary Fund, after French head Dominique Strauss-Kahn resigned as managing director May 18 to fight sexual assault charges, were to close late Friday, with three names expected on the shortlist.

French Finance Minister Lagarde is a strong favorite for the job, after being solidly backed by Europe, which is struggling to keep the IMF-backed bailout of Greece on the rails.

Meanwhile Carstens, Mexico's central bank chief, strained to gather support from emerging economies and break Europe's hold on the position.

A third, dark-horse candidate, Kazakh central banker Grigory Marchenko, told the Telegraph newspaper Thursday that Lagarde was too strong to challenge and hinted his name, backed by the ex-Soviet Commonwealth of Independent States, might not be in the hat when nominations close at midnight Friday, Washington time.

Europe's lock on the managing director's slot since the end of World War II -- in a pact with the United States, which controls the presidency of the World Bank -- was an issue in the race.

Global nervousness about the delicate financial situation in Europe's peripheral countries -- especially Greece -- also featured, a point favoring Lagarde.

But the perception of Europe's entitlement to the post did not sit well with some.

"The membership of the fund needs to assure us they will take a decision based on merit," Carstens told reporters in New Delhi.

"I presented my credentials, the international community knows me and I think I have the capacity to be the head of the fund."

Earlier Friday South African planning minister Trevor Manuel, speculated as a possible Africa-backed nominee, said he would not stand.

While praising Lagarde as "very competent", he criticized Europe's hold on the position.

"A lot more should have been done to persuade Europeans that this birthright is not a birthright that should find a resonance in an institution as important as the International Monetary Fund," he said.

Both Carstens and Lagarde have focused on wooing the huge emerging economies Brazil, Russia, India and China -- the so-called BRICs -- which could expand their shareholding in the Fund under the next director.

After starting in Brazil, Lagarde was in Beijing and then New Delhi this week. Carstens also launched his campaign in Brazil, and was disappointed to not get the endorsement of a fellow Latin American power.

Friday he was in New Delhi; he was to follow that with a stop in Washington Monday, and then head to Beijing.

The BRICs haven't tipped their hands, but "in private they have already conceded that they are mostly likely to back Lagarde," said Brookings Institution analyst Domenico Lombardi.

The see her "as an important backstop to the European crisis," he said.

The inability of developing countries to join hands has surprised some. On Friday Lagarde picked up support from a number of African countries at the meeting of the African Development Bank in Lisbon.

"At this stage they don't care enough about this position... to expend the political capital to want to change the status quo," explained Arvind Subramanian of the Peterson Institute for International Economics.

As strong as it is, Lagarde's candidacy is clouded by a pending investigation in France into her alleged abuse of authority, in a multi-million euro business dispute.

A court had been expected to rule on Friday on whether the investigation would go ahead or not. But instead it was postponed until June 9, after the IMF executive board is to make its decision.

Lagarde has said repeatedly that she did nothing wrong.

© 2011 AFP

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