Lagarde signs on the dotted line, gears up for first press conference

On the day of her appointment the IMF made public Lagarde’s contract, it’s interesting to examine the differences between hers’ and the one signed by her predecessor DSK…

Most are expected and unremarkable, some changes to language regarding parter/spouse and an updated salary. But papers were quick to pick up on the additional clause committing Lagarde to observe rules regarding her ethical conduct:

As managing director, you are expected to observe the highest standards of ethical conduct, consistent with the values of integrity, impartiality and discretion. You shall strive to avoid even the appearance of impropriety in your conduct.

This includes taking part in the Fund’s ethics training programme. The clause also deals more explicitly with conflicts of interest, both internal and external.

In the performance of your duties as Managing Director, you have an exclusive duty of loyalty to the Fund and shall avoid any conflict of interest or the appearance of such a conflict.

Interestingly, given that it was known by all that DSK intended to run for the French presidency, clause 2 (d) is extended to clarify:

you will not, in your personal capacity, attend political party meetings, assume any leadership role within a political party, or otherwise engage in partisan political activity.

As Alan Beattie comments, it is hard not to see these changes as a response to DSKs indiscretions and political aspirations. On the latter, Beattie mentions a proposal that “IMF MDs should sign a pledge to stay out of elected office for the first five years after they leave the Fund”.

Continue reading “Lagarde signs on the dotted line, gears up for first press conference”

After the European stitch up of the IMF top job, the case for major reform is clearer than ever

First published on the World Development Movement blog on 30 June 2011

As Christine Lagarde is briefed on her new job as the managing director of the IMF (the World Bank’s sister organisation, set up post-war to promote economic stability) we are left to reflect on the rigged selection process and sad inevitability of her appointment. The legitimacy of the Fund, already in pieces, was dealt a further blow by this debacle.

Lagarde was crowned long before the formal selection process had even begun. European leaders brazenly ignored their previous commitments to an open, merit-based and transparent process. Using the Eurozone crisis as an excuse both for the speed of the process (cut from ten weeks to six), and the need for a European head, they praised and promoted Lagarde’s candidacy, openly undermining the selection process. This necessity for local knowledge and understanding clearly wasn’t the case when Africa, Asia and Latin America were in crisis.

Full article available here

Consensus 101

Many of us thought that the leadership would be decided by vote. What with a number of countries, and crucially countries holding board seats, coming out in support of Cartens. But according to the official press release, the decision was made by consensus. Now consensus isn’t the same as unanimity, still I find it a little curious that it was reached so quickly. How might it have happened?

Assume that they follow the standard consensus process which looks a little like this:

 

Lets break it down step by step

Discussion: So here’s where they consider the merits of each candidate on paper and in person, no doubt scrutinising answers to their list of questions and scoring against the agreed criteria. These questions haven’t yet been made public but we hope that, in the interest of transparency, they will surface soon enough.

Proposal: After letting opposing sides argue it out for a piece, John Lipsky hushes the crowd. Sucks a thumb and tests the air to see which way the mood lay, clears his throat and sets out a proposal: “Lagarde to head the Fund”

Test for consensus: No. I’m sure the countries backing Carstens would stand their ground for a little while longer yet…Cue eye-rolling, foot tapping and impatient sighs from the US and European board members.

Concerns raised: Mexico got on the soap box? UK puts the kettle on.

Modification to proposal: Did they modify the proposal? Well, seeing as no modifications could realistically have been made, probably not. Unless there was an under the table promise of the deputy MD post (fat chance) or a high-level IMF appointment (time will tell).

Stand Aside: It is more likely that some members, if not for turning, simply backed down.

Test for consensus take two: Why not.

Consensus Achieved: So there you have it, pencils down and Lagarde on speed-dial

Ok, well I for one doubt it was anything like that. Still I’m curious as to how the debate, if there was one, played out. Did board members representing groups of countries have a clear battle plan? How long to stand their ground? What demands or concessions to make?

Perhaps a board member will tell all in days to come? We’ll keep an ear to the ground.

Press release: Reaction to the appointment of Christine Lagarde as head of the IMF

In response to the news that the IMF has selected Christine Lagarde to replace Dominique Strauss-Kahn as Managing Director of the IMF, Jesse Griffiths, Coordinator of the Bretton Woods Project has said:

“The Europeans have shamefully held onto control of the Fund in a well orchestrated stitch-up. Unfortunately, the outcome was clear long before the selection process officially started, once the Europeans decided to use their unfair over-representation at the Fund to force through their candidate.”

“There was a shocking lack of transparency to the whole process with no public interviews held and Board decisions once again made behind closed doors.”

Nick Dearden, Director of the Jubilee Debt Campaign adds:

“The nature of Lagarde;s selection shows once again how out of touch the IMF is. This further tarnishes the IMF’s legitimacy in a rapidly changing world.”

“This decision is bad news for European countries in crisis: the key architect of disastrous austerity policies in Greece is now at the helm of the Fund and she has already made clear to Greek legislators that they should listen to Northern Europe’s interests, rather than the interests of their own people. The IMF has learnt nothing from the debt crises of the past.”

For information: Jesse Griffiths + 44 (0) 7968 041 747 / jgriffiths@brettonwoodsproject.org

Exit poll: What if we got to vote?

Our poll on who you think the worst candidate nominated for head of the Fund has the favourite bringing up the rear. Lagarde recieved 33.71% of the vote with Carstens on 24.72%. The rest was split between the no-runner and Mr Early Retirement

Though the end result is by now all too clear, the Board will likely keep us waiting until June 30th before putting out an official press release announcing Lagarde as the new IMF boss.

All in all a rather malagrugrous state of affairs. I’d say!