Cameron prefers France's Lagarde over Brown to be new head of IMF

The Prime Minister and Chancellor have briefed against the former PM
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Indy Politics

He was one of the first world leaders to call for a tax on the banks, a move copied by Washington and, later, David Cameron's coalition, and pushed for Keynesian bailout packages which were backed by other governments.

Yet Gordon Brown's chances of becoming head of the International Monetary Fund appeared to be slim last night after a "petty", "blocking exercise" by Mr Cameron and George Osborne in favour of the French Finance Minister, Christine Lagarde.

Not only have the Prime Minister and Chancellor backed a candidate who is not British – an apparent breach of political protocol – they have actively briefed against Mr Brown, calling his putative candidature "inappropriate".

Mr Osborne yesterday described Ms Lagarde as the "outstanding candidate for the IMF - and that's why Britain will back her", adding: "I also personally think it would be a very good thing to see the first female managing director of the IMF in its 60-year history."

Allies of Mr Brown suspect the failure to back him is based on personal dislike as much as the Labour politician's record on the economy.

Friends pointed out that he was praised by President Barack Obama for his handling of the financial crisis during the G20 summit in London in 2009, and that Mr Brown's economic record was viewed with respect in Washington.

Mr Brown sat on the IMF's key policy-making committee for most of the last decade until he resigned in 2007 when he became prime minister. Friends said he had laid out a vision for a global "new deal" in his book, Beyond the Crash, on the world economy following the financial crisis.

In it, he said organisations such as the IMF needed a "progressive vision for a return to growth", beside an early warning system to ward off any future crisis. Mr Brown has called for global standards on banks, rather than "piecemeal national regulation". In a sign that he is pitching for the African vote, he made a speech in South Africa on Friday and has the backing of the Prime Minister of Ethiopia, Meles Zenawi.

When Mr Obama holds talks with Mr Cameron during this week's state visit, Mr Cameron is expected to be vocal in his support for Ms Lagarde, an Anglophile who has been praised for her role in tackling the European debt crisis, to succeed Dominique Strauss-Khan.

Mr Osborne developed an intense dislike for Mr Brown when he was shadowing the then Chancellor under Tony Blair's premiership.

There is also anger that those close to Mr Cameron and Mr Osborne are putting Peter Mandelson's name in the frame – apparently for no reason other than to needle Mr Brown. Lord Mandelson, a former business secretary, has the backing of the Chinese and has also been tipped for the head of the World Trade Organisation.

Mr Strauss-Khan's successor will be chosen by the IMF's executive board, and nominations will officially open tomorrow, closing on 10 June. The board will then choose the top three candidates to interview, with a new director chosen by 30 June.

Kemal Dervis, the former finance minister for Turkey, ex-World Bank economist and a second favourite, has ruled himself out.

A US Treasury official said last week that America had not decided whether to support Ms Lagarde or a non-European for the job.

Ms Lagarde, 55, has her own issues, however: A public prosecutor has recommended she be investigated for allegedly abusing her authority to sidestep the justice system and push through a ¤285m (£250m) arbitration settlement with the businessman and ex-minister Bernard Tapie, overruling Finance Ministry experts.

She denies wrongdoing and says she is the victim of a smear campaign.

The runners

Christine Lagarde French Finance Minister

The front-runner, Lagarde was recently described by the German Chancellor, Angela Merkel, as a "figure of excellent standing". Lagarde's closeness to the Sarkozy government may also be an advantage. She won praise for her work re-starting the French economy after the 2008 crash. If appointed, she would be the first female IMF chairman.

William Hill betting: Evens

Trevor Manuel Head of South Africa's National Planning Commission

Manuel is probably the strongest candidate from the developing world, but has a reputation for being outspoken. Last month, the former finance minister described a fellow cabinet member as a "racist" for making disparaging remarks about "coloureds". Manuel faces a struggle given the decades-old "tradition" of the IMF being led by a European.


Axel Weber Former chairman of Deutsche Bundesbank

Axel Weber's proving ground was a long period as the chairman of Germany's central bank, during which time the country faced some of its greatest economic challenges since reunification. Merkel's support for Christine Lagarde limits his chances.


Gordon Brown Former British PM

Gordon Brown could be a compromise candidate. Like Weber, however, a possible candidacy would be weakened by a lack of domestic support. David Cameron has refused to endorse him, despite recognition – outside Britain, at least – of the former PM's role in saving the world economy after the crash.