European support rising for Lagarde's IMF bid

By Angela Charlton

Associated Press

Published: Friday, May 20 2011 12:00 a.m. MDT

France's Finance and Economy Minister Christine Lagarde visits a Parisian supermarket and goods retailer in Paris Thursday May 19, 2011. Lagarde has emerged as a potential candidate to replace IMF chief, Frenchman Dominique Strauss-Kahn who resigned Wednesday, saying he wants to devote "all his energy" to fighting sexual assault charges in New York.

Jacques Brinon, Associated Press

Enlarge photo»

PARIS — France's frank, hard-working and chic finance minister, Christine Lagarde, emerged Friday as Europe's likely choice to lead the International Monetary Fund.

The IMF insists the departure of former chief Dominique Strauss-Kahn has not hurt its day-to-day operations, but it is clearly under pressure to find a successor fast to lead an organization that provides billions in loans to stabilize the world economy. A new chief would also draw attention away from the seamy scandal surrounding Strauss-Kahn, who quit this week to face charges in New York that he tried to rape a hotel maid.

The 24-member executive board, which will pick Strauss-Kahn's successor, held a preliminary discussion on Friday at the IMF's headquarters in Washington. But IMF officials gave no indication when a decision might be made.

Lagarde's chances for the top IMF job got a boost Friday when Kemal Dervis, a former finance minister for Turkey, said he did not want to be considered for the position.

Dervis, who had been considered perhaps the leading non-European candidate, said he was happy in his current position at the Brookings Institution, a Washington think tank. Dervis is a prominent economist who had spent 24 years at the World Bank, the IMF's sister lending institution.

Treasury Secretary Timothy Geithner said in a statement Friday that the United States was consulting broadly with IMF member countries "from emerging markets as well as advanced economies" during the search process for a new IMF leader.

A Treasury official on Thursday said the United States had not decided whether to support Lagarde or a non-European for the job.

The IMF may face a choice between naming its first woman leader or its first leader from the developing world. Emerging economies see Europe's traditional stranglehold on the position as increasingly out of touch with the world economy, but have not yet united around a candidate.

German Chancellor Angela Merkel said Friday that she "very much appreciates the French finance minister." She insisted she wasn't announcing Lagarde's candidacy, just sharing her views.

Merkel has also said the next IMF chief should be a European, since the fund is deeply involved in tackling the eurozone's sprawling debt crisis. Germany's view is critical, since as the continent's economic powerhouse it funds much of the bailouts to weaker eurozone nations.

Lagarde, 55, has a clean-cut image and has been praised for her acumen in helping steer Europe through the global financial crisis and its more recent debt woes. She speaks impeccable English and spent much of her career in the United States as a lawyer. One of the longest-serving ministers under French President Nicolas Sarkozy, Lagarde eased French labor laws and helped France weather its worst recession since World War II better than many other developed countries.

A champion swimmer as a teen, Lagarde is known for her colorful language and a sense of humor, and for being vocally pro-market in a capitalism-wary nation. When she took over as finance minister, she urged compatriots to stop their endless ideological yammering and "roll up your sleeves."

Italian Prime Minister Silvio Berlusconi has openly endorsed Lagarde for the job, saying she would make "a great choice." That view was backed by Swedish Finance Minister Anders Borg, who told journalists that Lagarde carries weight internationally and has a lot of experience.

Sarkozy hasn't spoken publicly about Lagarde, possibly because that would feed domestic conspiracy theories that Strauss-Kahn's troubles are a plot by political rivals. Strauss-Kahn, a Socialist, had been seen as the potential winner of France's presidential election next year, while the conservative Sarkozy's poll ratings are dismal.

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