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Christine Lagarde named first female chief of IMF

Jun 29, 2011

. Christine LagardeChristine Lagarde has been named as the new head of the International Monetary Fund, ending a fiercely fought contest dominated by Europe's intensifying debt crisis.

The French finance minister secured one of the key positions in international finance after the US government declared its support, giving her the majority of votes she needed among the IMF's 187 member countries.

"The results are in: I am honored & delighted that the board has entrusted me with the position of MD of the IMF!" Ms Lagarde said via Twitter minutes after the announcement. French President Nicolas Sarkozy's office declared it a "victory for France". The fund's Executive Board insisted on Tuesday that the 55 year-old, who will be the IMF's first female head and the fifth person from France to lead the insititution, had been chosen by "consensus."

"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 Fund said in a statement. Lagarde, it said, "is the first woman named to the top IMF post since the institution's inception in 1944".

With Greece's debt crisis again casting a shadow over financial markets and sparking violent protests on the streets of Athens, Ms Lagarde has little time before she has to prove that she can act as an independent voice for the IMF in what will be tense negotiations with European leaders over a second bail-out for the indebted country. She starts in her role at the IMF in Washington DC on July 5. Tim Geithner, the US Treasury Secretary, praised Ms Lagarde for her "exceptional talent and broad experience" as the Obama administration broke its silence on who its preferred candidate earlier in the day.

The Frenchwoman had been the strong favourite to succeed Dominique Strauss- Kahn, the former managing director who resigned last month to fight charges that he sexually assaulted a hotel maid in New York. Her only rival in the race, Agustin Carstens, Mexico's central bank governor, had argued that someone from outside Europe would be better placed to help the IMF play a useful role in tackling Europe's ongoing debt crisis.

Other emerging economies also voiced concern that the position should not automatically go to a European, a tradition since the fund was created in 1944 and that in returns has seen an American lead The World Bank.

Though Ms Lagarde won the backing of the governments of China and Brazil, they, alongside other emerging economies and the US, will want to ensure the IMF doesn't readily hand over further money to Greece if a second bail-out is unlikely to work. Bond investors expect that Greece will eventually default on its debts. The backing of Washington and Europe gave Ms Lagarde the support of 49pc of the voting quotas on the 24-member IMF executive board. UK Chancellor George Osborne described Ms Lagarde as the "outstanding candidate" to take over the helm of the world financial body