US hides hand as IMF race heats up

Lagarde officially launched her candidacy

GMT 05:29 2011 Thursday ,26 May

Arab Today, arab today Lagarde officially launched her candidacy

If appointed, Cristine Lagarde would be the first woman to head the IMF

If appointed, Cristine Lagarde would be the first woman to head the IMF The United States was tightlipped about its pick for the next head of the International Monetary Fund after Europe threw its support behind France's finance minister, Christine Lagarde. As the biggest IMF shareholder, the US could cement Lagarde in the powerful global finance post if it joins forces with the seven European IMF directors on the IMF board.
Yet, after Lagarde officially launched her candidacy in Paris Wednesday, and Jose Manuel Barroso, head of the European Commission, declared his support, the United States took the quiet tack.
By tradition at the 66-year-old institution, a European is the IMF managing director, while an American holds the number-two IMF post and the World Bank presidency.
The resignation of Dominique Strauss-Kahn a week ago, after he was charged with sexual assault and attempted rape of a New York hotel maid, has focused the spotlight on the developing world's drive to end the power-sharing agreement.

Lagarde, who announced her bid amid swelling support in European capitals after Strauss-Kahn's May 14 arrest, has drawn backing outside Europe from one country -- Congo, on Sunday -- but cautious comments elsewhere, including the United States.
US Treasury Secretary Timothy Geithner on Wednesday called Lagarde and Agustin Carstens, the governor of Mexico's central bank, "very credible" candidates to lead the International Monetary Fund, without endorsing either.
The two are the first declared candidates in the race to succeed Strauss-Kahn, who denies the sex charges.
"Two very credible people now said they'd like to run the institution," Geithner said at a Politico news event in Washington.
"There may be others that join them."
Nominations close June 10 and the 24-member executive board is expected to select the next managing director of the 187-nation IMF by the end of June.
Washington's North American neighbors, Mexico and Canada, praised the qualifications of Lagarde and Carstens, but only Mexico has taken a position, nominating Carstens.
"Both candidates are credible," Mexican Finance Minister Ernesto Cordero said. His Canadian counterpart, Jim Flaherty, called them "strong, qualified candidates" to lead the powerful Washington-based institution, the lender of last resort for struggling economies.
The United States took pains to be seen as neutral in the race. Geithner evenhandedly called Lagarde and Carstens "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."

Lagarde declared her candidacy shortly after 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 in a statement Tuesday that the longstanding arrangement "undermines the legitimacy of the Fund."
But Brazil's finance minister, Guido Mantega, said Wednesday his country was not ready to choose between Lagarde and Carstens, citing a need to hear what candidates had to say before deciding.
"I think it is good that their candidacies have been launched, in plural," Mantega stressed.
He said that he had already spoken with both Lagarde, the French finance minister, as well as Mexican central bank governor Carstens.
Carstens "called me requesting our support, and he is going to come here next week," he said.
Chilean President Sebastian Pinera praised Lagarde, saying she has "all the capabilities" to act as a "very good" IMF boss, but did not formally endorse her.
Geithner said that the United States would "ultimately" weigh in on the choice.
"We'll play a significant role in not just making sure the process is fair but the outcome is good."
Desmond Lachman, a resident fellow at the American Enterprise Institute in Washington and a former senior IMF staffer, said he expected the US to cast the deciding vote in Lagarde's favor.
"Geithner has to say what he says because he's got to look like he's open to somebody else other than a European taking office, but I don't think it's really serious," Lachman told AFP.
"If the Europeans are united behind Lagarde, I don't think that he's really going to object."

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