Nicolas Sarkozy and the French government were right this week to keep mum over who should succeed Dominique Strauss-Kahn at the head of the International Monetary Fund. France is no doubt less than ideally placed right now to push for its favorite candidate. But the former IMF chief’s official resignation does signify the beginning of a new era, the post-Strauss-Kahn period, and France certainly does have a say in the matter.
Developing countries have made it extremely clear that they are keen to send one of their own to Washington, and thus break the unwritten rule that the top IMF job should always go to a European. Their claim is of course worthy of consideration. The truth, however, is that it’s still too early for that.
The reasons for this have nothing to do with economic clout – emerging countries are getting more powerful by the day. Nor do their candidates lack the necessary skills: Kemal Dervis (Turkey), Trevor Manuel (South Africa) and Tharman Shanmugaratnam (Singapore) are all more than qualified to fill the post. The real problem lies in the fact that developing countries have yet to prove they clearly favor the international cooperation and multilateralism that post-war institutions like the IMF stand for. To give just a few examples: China has long been manipulating its currency, and its conduct on commercial reciprocity is far from exemplary; India has not always shown total transparency and has also been quite restrictive when it comes to giving foreign companies access to its markets.
Europe, for its part, continues to have a legitimate claim on the IMF leadership role. The Old Continent represents more than one-third of all global wealth, and it is the world’s biggest development aid donor. In addition, Europe is an outspoken advocate for stricter regulations of the market economy, and – unlike the United States – it cannot be blamed for the biggest financial crisis of the last 50 years. Finally, Europe needs the person at the helm of the IMF to be extremely familiar with the major borrowing countries, a list that right now includes Greece, Portugal or Ireland. These are strong arguments.
Christine Lagarde, the French finance minister, is the most legitimate European candidate for the IMF’s managing director position – either for a five-year mandate or until the end of Mr. Strauss-Kahn’s mandate. Widely admired by her peers, and not only by the British and Americans, she has an intimate knowledge of all present dossiers. Voted best finance minister by the Financial Times in 2009, she is well known in the international arena. By appointing a woman to its top position, the IMF would send a very strong signal. From France’s point of view, her appointment would wash away some of the recent humiliation.
But in order to receive the support of other countries, Christine Lagarde must first overcome one important hurdle: the Bernard Tapie row. Ms. Lagarde received heavy criticism for her role in a dispute between the French state and the tycoon Bernard Tapie. Even without this obstacle, the outcome of Ms. Lagarde’s potential candidacy for the IMF position is highly uncertain. Still, it is a job worth fighting for.
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Photo – World Economic Forum