French minister set to fight off emerging nation bid for IMF job

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Indy Politics

European nations appeared to be closing ranks behind the French Finance Minister, Christine Lagarde, to run the International Monetary Fund, trying to nip in the bud a campaign to appoint an emerging-market candidate for the first time in the organisation's 65-year history.

Mexico is to nominate its central bank boss, Agustin Carstens, for the job, which opened up last week when Dominique Strauss-Kahn resigned after being charged in the US with sexually assaulting a hotel maid.

Mr Carstens, 52, is an economist with a doctorate from the University of Chicago. He is a former deputy managing director of the IMF and finance minister of Mexico, and a respected figure on the international financial circuit.

Ms Lagarde remains the front-runner, however. Before being head-hunted to join the French government in 2005, she had spent much of her professional career as a lawyer in the US.

George Osborne, the British Chancellor, said Ms Lagarde was an "outstanding candidate", and the German Chancellor, Angela Merkel, called her an experienced "figure of excellent standing".

In France, one of President Nicolas Sarkozy's allies endorsed her yesterday. "I hope it will be a European and Christine Lagarde obviously has all the qualities to be an excellent director of the IMF," said Claude Gueant, Interior Minister.

In April 2009, amid a financial crisis that hit hardest in the West, leaders of the Group of 20 economic powers endorsed "an open, transparent and merit-based selection process" for heads of global institutions. China in particular has been vocal over the past week that proper consideration must be given to all potential candidates.

Trevor Manuel, who was South Africa's finance minister, and Montek Singh Ahluwalia, senior economic policymaker in India, are among other potential runners and riders.

The IMF board expects to appoint a successor to Mr Strauss-Kahn by 30 June, and has promised to interview more than one candidate. Ultimately, the decision could hinge on a preference by the US, the IMF's largest contributor and voter. Under the unwritten agreement that settled the world's international financial architecture, the IMF is headed by a European and the World Bank by a US candidate, and backing a non-European candidate now implies giving up its lock on the World Bank job too.

Mr Strauss-Kahn, meanwhile, remains under house arrest at an apartment in Manhattan belonging to the security firm he has hired to guard him, under a $6m bail agreement.