Sean O'Grady: Not a job for Europe's rock star

Related Topics

The IMF used to be an organisation in which the rich economies of the West bailed out the distressed economies of the emerging world. Now the position is precisely reversed.

With the exception of Germany, and, maybe, Japan, it is the West that is virtually bankrupt. And it is now the fast-growing economies of Asia and Latin America that are bankrolling the West. Even the United States, which still calls so many of the shots at the IMF, is effectively funded by China. And yet, China has fewer votes at the IMF than the UK.

So there is an argument of equity for giving the top IMF job, which has been hastily vacated by Dominique Strauss-Kahn, to a non-Westerner. But there is also a very good practical reason too, and it is this: they would be that crucial bit more likely to offer unsentimental, unflinching advice on the one course of action for these distressed eurozone economies that is always ruled out, and that is to get the hell out of the eurozone.

I just think it is very hard to imagine Christine Lagarde being able to say to Greece, for example: "Look, you do not need another bailout, and whether or not you default on your debt; the best course of action for you in the long term is an orderly withdrawal from the single currency."

Impressive as she is, the French finance minister is, I think, like the other European candidates, too steeped in the European Union establishment and too much part of the French elite to be able to abandon the euro as an article of faith.

For a clear-headed, dispassionate Singaporean, let us say, the decision on recommending that Greece leaves the euro would be a much less traumatic affair.

And even if that were not the case, we might still be better off with someone for whom the idea that they are a Sarko crony could never stray into our minds. So while it is true that Ms Lagarde knows the eurozone's funny little ways, she might also be more blind to its failings.

Political "clout" – which she does possess – is only useful if it is wielded in the right direction.

Besides, the IMF's clout is more financial than political, and its methods as much intellectual as diplomatic. It must have a head determined to get to the root of Europe's problems, and not just throw money at bailout after bailout. And, let there be no doubt, the fundamental cause for the successive sovereign debt crises in most of the eurozone countries is competitiveness, or their lack of it, and their inability to regain it under the current system.

The "one size fits all" interest rate regime has failed. Right now the European Central Bank is planning rate hikes for fear of inflation. They may be able to cope with that in Germany, but they will push Spain's broken property market and busted banks even further into the abyss, triggering another crisis.

A distressed economy needs the option of devaluing its own currency (as the UK has) to get exports going and get back to normal.

Some time in the next few years a politician in Portugal, Ireland or Greece, maybe an unpleasantly nationalistic and rabble-rousing one, will come along and call for an end to the misery, the endless "austerity", the stagnation and the emigration, and call on their country to get out of the euro.

The next head of the IMF would be wise to pre-empt that. For all her status as a "financial rock star", Ms Lagarde is not the woman for that job.

I can't pronounce his name, but I'd rather Tharman Shanmugaratnam (the aforementioned Singaporean) any day.


React Now

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: PHP Developer - Mid / Senior

£25000 - £40000 per annum: Recruitment Genius: This fast growing digital agenc...

Recruitment Genius: E-commerce Partnerships Manager

£50000 - £100000 per annum: Recruitment Genius: This is a newly-created partne...

Recruitment Genius: Senior Project Co-Ordinator - FF&E

£35000 per annum: Recruitment Genius: A Senior FF&E Project Co-ordinator is re...

Recruitment Genius: Part Time Carer / Support Worker plus Bank Support

£10 per hour: Recruitment Genius: A delightful, 11 year old boy who lives in t...

Day In a Page

Read Next
Amos Yee arrives with his father at the State courts in Singapore on March 31  

Singapore's arrest of a 16-year-old YouTuber is all you need to know about Lee Kuan Yew's legacy

Noah Sin
David Cameron and Ed Miliband officially launched their election campaigns yesterday after Parliament was dissolved  

All-or-nothing simplicities are going to blight this election

John Rentoul
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor