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French Finance Minister Christine Lagarde Announces IMF Candidacy

French Finance Minister Christine Lagarde announced her candidacy for the top IMF job at a press conference in Paris.
French Finance Minister Christine Lagarde has formally announced her candidacy to head the International Monetary Fund (IMF).

Lagarde's bid for the IMF top job comes a day after emerging countries expressed dissatisfaction over the fund's decades-long convention that it be headed by a European.

In a bid that played down her European roots, Lagarde told reporters in Paris today that she had the right professional qualifications for the position.

"I think that my intimate knowledge of those mechanisms of the European Community and the eurozone, of its many leaders, can help," Lagarde said, "but I am not suggesting that it should be an add-on and a plus on which my candidacy should be based."

Lagarde's name was floated shortly after nominations opened for a new IMF head to replace former managing director Dominique Strauss-Kahn, who resigned on May 18 after his arrest in New York on charges of sexual assault. Strauss-Kahn denies the charges.

Her candidacy was immediately welcomed by European Commission head Jose Manuel Barroso, who today described her decision as a "vital contribution to the stability of the international economy."

His remarks follow endorsements from other major European powers in recent days, including debt-strapped Ireland, as EU leaders concerned over the bloc's growing debt crisis scrambled to nominate a trusted player to the post.

BRICS In The Road

Emerging economies have expressed other concerns, however.

A statement issued on May 24 by the bloc referred to as BRICS -- Brazil, Russia, India, China, and South Africa -- slammed Europe's "obsolete" hold on leadership of the influential lending institution, and repeated the group's long-standing criticism of the World War II-era "gentlemen's agreement" in which a European heads the IMF and an American directs the World Bank.

The global financial crisis triggered by a housing-market and banking crisis in the United States and Europe shows the need for a fresh perspective, the BRICS statement argued, reflecting "the growing role of developing countries in the world economy." A European has led the IMF for the last 65 years.

Lagarde tried to distance herself from that debate today, saying: "Being a European should not be a plus. It shouldn't be a minus, either."

She added that she was not "arguing for my candidacy because of the fact that I am a European or because I've been engaged in setting up those financial institutions that have helped in the bailouts that we've put in place."

Still, the position of some BRICS countries is perhaps less united than the group's statement suggests.

Reports say Brazil is privately supporting Lagarde, while the French have also suggested that the 55-year-old lawyer has Beijing's support. China has refused to comment, while South Africa may put forth its own candidate.

Russia, meanwhile, has indicated its support for Kazakhstan's central bank chief, Grigory Marchenko.

Fighting A Different Fight

The BRICS countries have yet to endorse a single candidate, and their combined voting power at the fund is also less than that held by the United States alone.

Some analysts suggest the move amounts to little more than political posturing, while others argue that BRICS countries are seizing the moment to push for broader institutional reforms.

Sergei Seninsky of RFE/RL's Russian Service believes the debate over Lagarde is proxy for a much bigger discussion on the IMF's role in a globalized economy.

"It is not about the head of IMF," Seninsky says. "It is about IMF itself: about its structure, about its reforming -- to achieve such a situation when the structure of the IMF itself will reflect the structure of the world economy now more precisely."

He points out that China, the world's second-largest economy, currently has a smaller IMF voting share than Japan.

The next IMF head will be chosen by the IMF's executive board, whose 24 members, representing the body's 187 members, are to interview the top three candidates and come to a decision by June 30.

The top contender to Lagarde is Mexico's top banker, Agustin Carstens.

U.S. Treasury Secretary Timothy Geithner called both Lagarde and Carstens "very credible" candidates to lead the IMF, without endorsing either.

French Connection

Concerns have been raised over Lagarde, who faces a potential legal investigation on allegations of abuse of power over the 385 million euros ($540 million) awarded to a French businessman in 2008. Lagarde denies the allegations.

A French court is set to make a decision on the probe on June 10, which is also the cutoff day for countries to submit nominations for IMF head.

France was the first country to borrow from the IMF, which offered over $90 billion in emergency loans last year and provides one-third of the European bloc's bailout packages.

Three of the IMF's last five directors have also been from France.

written by Kristin Deasy with material from RFE/RL's Russian Service and agencies
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