France's Christine Lagarde named head of IMF

Posted by elena On Wednesday, June 29th 2011 in Economy

Christine Lagarde was named on Tuesday the new head of the International Monetary Fund. The French Finance Minister will begin her five-year term on 5 July. She will be the first woman to occupy the position of IMF managing director in the entire history of the institution.

Lagarde won the position over Mexican Central Bank Governor Augustin Carstens, after receiving support from the United Sates, as well as from Russia, China and Brazil. The IMF said in a statement that, although both candidates were suitable, Lagarde was chosen "by consensus". The IMF's decision means that the leadership of the institution remains in the hands of a European. Almost immediately after she was announced as the new managing director of the IMF, Legarde tweeted that she was "honoured and delighted". The French Finance Minister's first task will be to find ways of dealing with the debt crisis in Greece, which poses a serious threat to the Euro zone.

After hearing the news, Carstens sent his best wishes to Lagarde and expressed his hope that she would make progress in "strengthening the governance" of the IMF. He said that she would prove a "very competent leader". United Sates Secretary of the Treasury Timothy Geithner said that Legarde's talent and experience would prove "invaluable" for an "indispensable institution" at a time of crisis for the world economy.

France's President Nicolas Sarkozy said that Lagarde's appointment was a "victory" for the country. Soon after her appointment, Lagarde urged Greece to go on quickly with the required austerity measures. During an interview with TF1 television, she called for the political opposition in Greece to support the current governing party in implementing the austerity plan. She added that leaving the Euro zone would be the worst scenario for the country and must be avoided.

It has been an unwritten convention that the leadership of the IMF should be held by a European, while that of the World Bank should be given to an American. Lagarde is the successor of compatriot Dominique Strauss-Kahn, who vacated the position in May, after being arrested in New York for allegedly assaulting a hotel maid. Strauss-Kahn denied the accusations and is currently in New York, awaiting his trial under house arrest. Lagarde received her appointment despite an unfinished legal case in which she has been involved. A verdict concerning her role in an arbitration payout will be given on 8 July.