Source: Agencies | 2011-6-29 | NEWSPAPER EDITION
THE International Monetary Fund board early this morning elected French Finance Minister Christine Lagarde as the new managing director of the global lender.
"The executive board of the International Monetary Fund today selected Christine Lagarde to serve as IMF managing director and madame chairman of the executive board for a five-year term starting on July 5, 2011," the IMF said in a statement.
Her win was assured after emerging powers China, Russia and Brazil declared their support for her and the United States followed with its endorsement ahead of the meeting of the 24-member board.
She replaces Dominique Strauss-Kahn, who resigned last month to fight charges of sexual assault against a New York hotel maid.
Lagarde, 55, defeated Mexico's Central Bank Governor Agustin Carstens, making her the first woman to lead the global institution.
Lagarde will have to immediately deal with an IMF-EU effort to keep debt-stricken Greece afloat and focus on potentially thorny IMF "spillover reports" that analyze the economic and policy actions of major economies.
Earlier yesterday, Brazil said it would back Lagarde, a surprising decision given most countries in Latin America support Carstens.
With support from major emerging powers Brazil, China and Russia already clear, the United States moved to cement Lagarde's victory.
"Minister Lagarde's exceptional talent and broad experience will provide invaluable leadership for this indispensable institution at a critical time for the global economy," US Treasury Secretary Timothy Geithner said in a statement yesterday.
The race has been one of the most hotly contested succession battles in IMF history as emerging market nations expressed displeasure with the 64-year tradition of having a European head the IMF and an American lead its sister institution, the World Bank.
In the end, the lack of backing from major emerging nations sunk Carstens despite his support from Latin America, Canada and Australia.
Geithner nodded to the unhappiness among developing countries at European-US dominance of the two pre-eminent international financial institutions, but noted Lagarde had won broad support.
The United States, which holds the most voting power at the IMF, had refused until the final stage of the process to say who it was supporting in the contest.
"If China, Brazil, India and others had thrown their weight behind Carstens, then the US would have been in a very difficult situation," said Arvind Subramanian, a senior fellow at the Peterson Institute and the Center for Global Development think tanks in Washington.