Lagarde launches bid for second term as IMF chief

Early backing from likes of Britain, France may mute talk of legal woes disqualifying her

PARIS • Ms Christine Lagarde has launched her campaign for a second term as managing director of the International Monetary Fund (IMF) with ringing endorsements from a host of major economies - and a court case against her looming in her native France.

The former French finance minister, who trained as a lawyer, has no obvious challengers and has long been open to serving another five- year term.

The prime ministers of Britain and France backed her publicly on Thursday.

"I am candidate for a new mandate. I was honoured to receive from the start of the process the backing of France, Britain, Germany, China (and South) Korea," Ms Lagarde, 60, told France 2 TV in an interview from the World Economic Forum in Davos yesterday.

The early endorsements from such powerful economies may act as a disincentive for others to apply and mute any talk of her legal difficulties disqualifying her.

Ms Lagarde has been dogged off-and-on since her initial appointment in 2011 for her role in a long- running business scandal when she was France's finance minister.

Last month, a French judge ordered her to face trial for negligence in a special ministerial court over the 2008 payout of about €400 million (S$622 million) to businessman Bernard Tapie.

Mr Tapie himself was ordered last year to repay the money, which he received as state compensation for a business transaction in which he later claimed he had been defrauded.

Ms Lagarde has said she will appeal against the judge's order.

"I feel that I always acted in the state's interest and within the law. I have my conscience for me in this affair. I hope the courts... will agree with that," she told France 2.

Aside from the legal problems, her candidacy is likely to raise questions among some emerging countries about whether a European should still lead the Washington- based institution.

Although there is no formal requirement that the leader of the IMF has to come from Europe, it has been the practice ever since the institution was set up after World War II, while the World Bank has always been led by an American.

French candidates, in particular, have held the post for almost 40 of the past 70 years. Ms Lagarde's predecessor Dominique Strauss- Kahn was forced to resign over a sex scandal in 2011.

IMF first deputy managing director David Lipton told BBC last year that the next appointment could come from a non-European country and would be "strictly merit-based".

But Ms Lagarde was praised for winning United States Congress approval of a landmark reform programme that shifted more voting power to China and other key emerging markets. She has also generally been considered a skilful, charming negotiator.

A synchronised swimmer in her youth, Ms Lagarde, the first woman to hold the IMF post, once said in an interview that it was the sport that taught her the maxim "grit your teeth and smile" in the man's world she moves in.

REUTERS

A version of this article appeared in the print edition of The Straits Times on January 23, 2016, with the headline 'Lagarde launches bid for second term as IMF chief'. Print Edition | Subscribe