Christine Lagarde named IMF head

French finance minister, who succeeds Dominique Strauss-Kahn, becomes first woman to hold top IMF job French finance minister Christine Lagarde has become the new head of the IMF after the fund’s board confirmed her appointment following a meeting in Washington. Lagarde, who takes over from Dominique Strauss-Kahn, is the first woman to hold the post. She will begin her five-year term on 5 July. After the board’s announcement, Lagarde tweeted : “The results are in: I am honored & delighted that the Board has entrusted me with the position of MD of the IMF!” Official confirmation came after the US hadformally endorsed Lagarde’s candidacy. Treasury secretary Tim Geithner said: “Minister Lagarde’s exceptional talent and broad experience will provide invaluable leadership for this indispensable institution at a critical time for the global economy. We are encouraged by the broad support she has secured among the fund’s membership, including from the emerging economies.” French president Nicolas Sarkozy was quick to show his support for his compatriot. He said in a statement: “The French presidency rejoices that a woman is taking on this important international role.” Chancellor George Osborne hailed Lagarde’s appointment as “good news for the global economy and for Britain.” He said: “She is the best person for the job, which is why Britain was one of the first countries to propose her. She has been a strong advocate for countries tackling high budget deficits and living within their means.” Lagarde has the support of most European countries, and is seen as an ideal candidate to handle the IMF’s ongoing bailout of weak eurozone countries. Many observers felt the time had come for a non-European to take the post, but despite initial coolness towards her candidacy China and Russia backed Lagarde’s appointment. Along with the US, she has the explicit support of nations including Indonesia and Egypt, representing more than half the IMF’s 24 voting board members. The executive board represents the 187 members of the IMF. Russian finance minister Alexei Kudrin told the ITAR-TASS news agency: “I think that she has all the necessary qualities and we will support her candidacy. She will be able to make this key international organisation more dynamic, and ensure its future reform.” Her closest competitor, Mexican central banker Agustín Carstens, won endorsements from Mexico, Canada and Australia, which together represent 12% of IMF board seats. Geithner commended Carstens “on his strong and very credible candidacy.” Lagarde’s appointment caps a tumultuous period for the IMF, currently led by Strauss-Kahn’s deputy John Lipsky, who was planning to retire before Strauss-Kahn’s arrest. “I am well aware that recent events have left open wounds,” Lagarde said in a statement to the IMF. “I know that John [Lipsky's] departure, coming as it does at the very worst of times, will leave a big hole. The incoming MD must take pains to show the outside world that this great institution is not only leading in terms of expertise, but also in terms of integrity and work ethics.” Emerging market countries initially fought hard to have one of their own claim the top IMF job. The IMF has been headed by a European since is creation at the end of second world war. But with Europe in crisis the French minister emerged as the clear favourite. Lagarde, 55, led the Chicago-based law firm Baker & McKenzie before entering French politics in 2005. She is the first woman to head the IMF. Mohamed El-Erian, a former IMF official and now chief executive of Pimco, one of the world’s largest bond investors, said: “[Lagarde's] major priority is to restore legitimacy to an institution demoralised by the arrest of Strauss-Kahn, seen to be excessively influenced by political directives, and lacking global legitimacy, especially among emerging economies. El-Erian added: “She needs to follow up on her promises to emerging economies, including removing nationality-based approaches to key appointments. “She can start with the soon-to-be-vacant first deputy post which, traditionally, has been a US Treasury decision rather than one based on merit. “She needs to make the IMF more representative of today’s global realities, restore technical rigor to its interactions with member countries, and prepare the balance sheet for the potential of some financial impairment on account of recent lending.” Christine Lagarde IMF Economics France Global economy Europe Dominic Rushe guardian.co.uk

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