US hides hand as IMF race heats up

25th May 2011, Comments 0 comments

The United States steered a steady course Wednesday as competition to head the International Monetary Fund intensified with the entry of French Finance Minister Christine Lagarde into the race.

Lagarde, who announced her bid at a Paris news conference amid swelling support in European capitals, has drawn backing outside Europe from one country -- Congo -- and cautious comments elsewhere, including the United States.

US Treasury Secretary Timothy Geithner called Lagarde and Agustin Carstens, Mexico's central bank chief, "very credible" candidates to lead the International Monetary Fund, without endorsing either.

The two are the first declared candidates to succeed Dominique Strauss-Kahn as IMF managing director, following his resignation to face sexual assault charges that he denies.

"Two very credible people now said they'd like to run the institution," Geithner after Lagarde announced her candidacy.

"There may be others that join them," he added.

Washington's North American neighbors, Mexico and Canada, also praised the qualifications of Lagarde and Carstens, but only Mexico has taken a position, nominating Carstens.

Geithner evenhandedly called both "very talented people."

"Christine Lagarde is an exceptionally capable person. An excellent mix of financial, economic knowledge, talents and the kind of political skills you need to navigate this context. Agustin has that as well."

Emerging-market and developing countries have called for an end to the unspoken agreement that a European heads the IMF and an American is the president of the World Bank, its sister institution.

On Tuesday the world's largest emerging economies slammed Europe's "obsolete" push to lock up the top job again.

IMF directors from China, Russia, Brazil, India and South Africa -- the so-called BRICS economies -- said that the longstanding arrangement "undermines the legitimacy of the Fund."

The United States, as the biggest IMF shareholder, took pains to be seen as neutral in the race, in which nominations close June 10. A selection is expected by the end of June.

Geithner said that he United States would "ultimately" weigh in on the choice.

"But what we want to do is to make sure... that it's for the good of the institution that there's a contestable process," he said.

"Remember, Christine Lagarde's strength is not, I would say, principally that she is European. Her strength -- and this should be the strength of anybody -- is what is the experience, skills and talent they bring to the job," he said.

"But of course, ultimately, we're the largest shareholder in the institution and we'll play a significant role in -- not just making sure the process is fair but the outcome is good."

Geithner stressed that the US has been supporting reform of the IMF to better reflect the global economy, including having a "contestable appointment process."

"You can look at this now and be much more confident that you're going to have an open process, where people are going to look for the candidate that not just has the most experience and technical capacity but who can command the broadest base of support."

The BRICS, in their statement, recalled that as Strauss-Kahn was selected in 2007, then-Eurogroup president Jean-Claude Juncker pledged that "the next managing director will certainly not be a European."

"In the Euro group and among EU finance ministers, everyone is aware that Strauss-Kahn will probably be the last European to become director of the IMF in the foreseeable future," Juncker had said.

© 2011 AFP

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