Acceptance speech dry run? Lagarde meets the board, gets crowned

Queen Lagarde with her European handlersThe IMF has released Christine Lagarde’s statement to the board for your reading pleasure. Like Carstens’, she mentions a letter of candidacy, although hers it seems is not publicly available. She covers most issues with broad brush strokes, opting for a focus on steering and managerial duties rather than presenting technical positions.

On the same day campaigners in Washington held a mock coronation of Lagarde to emphasise their disastifaction with the process and particularly the way European countries have acted since the DSK scandal broke. Sarah Wynn-Williams of Oxfam said: “The backroom deal that has pushed Lagarde forward makes a mockery of the appointment process. The new IMF chief should be elected openly, not crowned by Europe.”

In Lagarde’s statement, she outlined five key principles that she feels should guide the IMF over the next five years: Relevance; Responsiveness and surveillance for better crisis prevention; Sufficient resources and adequate tools; Increased legitimacy; and Diversity and team work. Many of the points here were touched on in an exclusive interview she gave last week.

It reads a bit like a management self-help book. None of it addresses in detail the policy questions set out by civil society organisations last week. She never replied to those questions, though to be fair neither did her competitor. We’ll be posting shortly a detailed assessment of the candidates positions against the key questions.

Offering a response to the claim of Agustín Carstens’ and others that her appointment would lead to a potential conflict of interest she says: “How would the Fund ensure that during the MD’s mandate, not one single country of the region from which the MD comes from would request financing? One thing is certain: it would eliminate both candidates in the current selection process, even though France has no arrangement with the IMF.”

Although a valid point, in this case the position of the EU is somewhat unique seeing as they act as a major creditor to the institution as well as consisting of nations, France and Germany in particular, who are significantly exposed to the Greek debt, and they have a plurality of votes and seats on the board. No other region or country grouping seemingly dictate Fund policy, be a major creditor, and be a major borrower all at once.

She also addresses briefly concern regarding her nationality and the selection process, repeating her line that she is not running as a European.

Lagarde with her chocolatesThe US is unlikely to make a public statement supporting either candidate before the vote. Instead using their near 17% voting share to give the seal of approval to any ‘consensus’ decision. Of course that consensus is already defined by the fact that Europeans stitched up the process beforehand. We wonder whether Lagarde shared the (presumably Belgian) chocolates she received as a gift from European finance ministers with the Board? Or maybe only the board members from Europe…

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