Editorialising against Lagarde: across the spectrum

It seems like there is almost no newspaper or comment writer out there that actually wants Lagarde to be the head of the IMF. The influential weekly news magazine, The Economist, editorialised against Lagarde last Friday.

“… the stitch-up, whereby the head of the IMF is a European and the head of the World Bank is an American, is a disgrace. International posts should be filled according to merit. And the growth of emerging economies makes it even less defensible.

Not exactly Europe’s moment

Moreover, the case against appointing a euro-zone finance minister as head of the IMF now is overwhelming. The main issue facing the fund is the euro zone. The fund is supposed to be an impartial arbiter of good economic policy. It is the only organisation likely to force a rethink of the euro zone’s failed strategy towards Greece, Ireland and Portugal. There were already fears that Mr Strauss-Kahn’s presidential ambitions led the fund to be too soft on Europe. Ms Lagarde has played a central role in forming the euro zone’s response to its debt crisis, and whatever her private views, she has a public record of defending the indefensible.”

That was a double whammy – indicting the Fund’s (and Lagarde’s)  approach to European debt crises and the process for selection.

And conservative UK newspaper The Telegraph carried a comment piece by Liam Halligan, chief economist at Prosperity Capital Management, which argued “it would be ‘a historic mistake’ if the new IMF boss was a European. … After all, the emerging markets now account for four-fifths of the world’s population and almost half of global GDP. Since 2008, they have also commanded a higher share of world trade than the West.” Hmmm, this isn’t sounding good for Lagarde.

And the opinion around the major emerging markets isn’t very promising either. While other members of the French government had said that China endorsed Lagarde, that decision doesn’t seem to have reached down to the editorial department at the state-owned China Daily newspaper. Writing at the end of last week, it called for ‘a brave new IMF’.

“The new head will not only have to restore the agency’s reputation and morale but also oversee the IMF’s transformation into a competent international financial institution that is relevant to the world today.

Following a decades-old practice, which automatically dictates a European person heads the Fund, Europe is uniting behind Christine Lagarde, the French finance minister.

But if the IMF is to swiftly adapt itself to the new realities of the global economy, it is time to abandon the unwritten convention that its head has to come from Europe.”

I suppose Lagarde can reassure herself by reading the French press, who seem to have mostly ignored previous European promises, changing global geopolitics, notions of democracy, or any sense of fair play. See for example in the Les Echoes. Though, even in France there is opposition, for example from Benoit Hamon spokesperson of the Socialist party and Nicolas Dupont-Aignan of the anti-EU Debout la République political party. Will the rest of France catch up? Will the rest of Europe listen to the rest of the world?

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