Lagarde victorious as IMF picks new chief

The International Monetary Fund has unanimously chosen French finance minister Christine Lagarde as its new chief on Tuesday evening. Lagarde, who starts in her new role next week, had been backed by Europe, the US, Russia and China.

­Lagarde will be the first female managing director of the global institution and the eleventh European. Her five-year term will begin with confronting the European debt crisis, which hangs gloomily over the global economy. Specifically, Lagarde will face difficult decisions to be made through the finance and interior affairs departments of her fellow Europeans to prevent a default by Greece.

"I am, of course, extremely proud, a bit moved and a little bit sad as well, because this is a page in my life in the service of France that is turning," Lagarde said after the vote, thanking the fund's global membership for the broad-based support.

Lagarde’s first priority is to unify the IMF's staff of 2,500 employees and 800 economists and restore their confidence in the organization, the new IMF chief said in an interview on French television after the announcement.

Lagarde was chosen by consensus, the IMF said in a statement. Mexico's Agustin Carstens challenged her, but his candidacy never took off.

As well as the European crisis, Lagarde is expected to encounter pressure from developing nations that want a greater voice at the IMF. She will also fight against the somewhat tarnished reputation of the fund, as Dominique Strauss-Kahn, the man Lagarde is replacing, is being tried by a US court on sexual harassment charges. Meeting Strauss-Kahn is one of first items on Lagarde’s agenda, she said.

Under an informal arrangement dating back to the end of World War II, a European has always led the IMF and an American has run its sister organization, the World Bank.

Christine Lagarde, 55, will be the first IMF leader who is not an economist. She led the Chicago-based law firm Baker & McKenzie before entering French politics in 2005.

Questions have surfaced about her role in getting arbitration in 2008 for French businessman Bernard Tapie, who won almost $500 million in compensation for the mishandling of the sale of Adidas, a sportswear manufacturer. A decision is expected on July 8 on whether to open an investigation into Lagarde’s actions, as she was the French finance minister at the time of the incident. But Lagarde says she has "total confidence" concerning the matter.

­Radio host and author Stephen Lendmann does not have much faith in Christine Lagarde as Strauss-Kahn’s successor, calling the IMF a “financial oligarchy” and “bankers’ occupation.

America decided who would be the IMF’s head, because America controls the IMF,” says the radio host. “Privately, they chose Lagarde weeks ago. She is an extreme neo-liberal practitioner. It means entrapping countries in debt, forcing repressive policies on them, deregulation, privatizing state industries, mass lay-offs, benefits freezes or cuts, social benefit destruction – and it goes on and on and on. The vultures are circling around Greece right now.