Europe Rallies behind Lagarde, BRICS Drop Their Guard
All 27 members of the European Union rallied around French Finance minister Christine Lagarde for the post of IMF director. Lagarde, 55, a former synchronized swimming champion was for many years a member of Baker & Mackenzie, a top law firm in the United States. Additionally Ms. Lagarde had the foresight to cultivate contacts in Asia and is therefore the favorite candidate to succeed Dominique Strauss-Kahn.
It was almost as if the European Union's political class was rallying around a France that was forced to watch a man considered presidential timber reduced to the status of a common felon. Lagarde's succession would salvage some of that pride.
One interesting argument advanced in favor of Ms. Lagarde by Nobel prize-winning economist Robert Mundell was that her ascension to the post would be a reaffirmation of women's honor, given the circumstances that led to Strauss-Kahn's resignation.
On the basis of that argument, one can speculate on who the preferred nominee would be if Strauss-Kahn had other predilections. US Secretary of State Hillary Clinton provided support to the feminist slant by claiming that "We welcome women who are well qualified and experienced to head major organizations such as the IMF."
The selection of Lagarde is not going to go down without a fight, particularly from the BRICS countries (Britain Brazil Russia, India, China and South Africa). These countries, who sometimes hear unflattering remarks about the transparency and probity of their politics, were happy to lambaste the Europeans about the lack of transparency in the selection process and their reliance on the "obsolete unwritten convention" that the director of the IMF had to be a European.
Chinese Foreign Ministry spokeswoman Jiang Yu claims that the selection process should be competitive as part of the reforming of international financial organizations. When Strauss-Kahn was chosen, Jean Claude Junker of Luxembourg had assured them that the "next managing director will certainly not be a European". Of course Junker did not foresee the European sovereign debt crisis that made leadership of the IMF indispensable for the EU.
The BRICS have failed to back up their moral challenge to the Europeans by settling on an alternative candidate. A contender to Lagarde did emerge, Mexican Central Bank Governor Agustin Carstens. Had the BRICS united behind Carstens, they would have put the United States in a bind, because it would have been hard for the United States to vote against its neighbor and partner in the North American Free Trade organization (NAFTA).
U.S. Treasury Secretary Timothy Geithner praised both candidates but was more upbeat about Lagarde whom the Americans, given her long sojourn in the United States, see as one of theirs.
The BRICS may have common interests, but they are also divided. India has already accused China of soft-pedaling opposition to Lagarde. The executive directors of the BRICS were objecting that her candidacy was being railroaded through. Lagarde has in the meantime announced plans to visit China and Brazil to secure their support for her candidacy. These visits will undoubtedly lead to mutual recriminations amongst the BRICS countries.