The International Monetary Fund has said its managing director, Christine Lagarde, is the sole candidate for the new term beginning July. She has the backing of both Western nations and major economies in Asia.
Named to head the International Monetary Fund (IMF) in July 2011 for five years, Lagarde officially entered her nomination for a second term at the World Economic Forum in Davos, Switzerland, in January this year.
British finance minister George Osborne formally nominated the center-right former French finance minister within minutes of the appointment process opening on Jan. 22.
Endorsements quickly followed from France, Germany, Britain and Italy. On Wednesday, the United States Treasury Department also gave its official backing, meaning Lagarde, 60, is virtually assured a second five-year term.
Support from emerging economies
More significantly, China, South Korea and Mexico also signalled they would support Lagarde, ensuring there would be no joint move by the big emerging economies to try to wrest the top IMF job from European hands.
In 2011, Lagarde still struggled to win a contest with several developing country candidates to take over the IMF as Europe was sinking deep into economic crisis. Her victory came amid criticism that the IMF's top job should not be locked down by a European, as it has since the institution was created in 1944.
Since then, Lagarde has kept the IMF involved in a series of financial rescues for eurozone countries, notably Greece, despite misgivings in less developed states in Asia and Latin America.
Lagarde has also built consensus for China's yuan to be added to the major reserve currencies used to calculate the Special Drawing Rights in which the IMF lends to its members. Moreover, she's managed to implement a reform of voting rights in the global lender of last resort to give greater weight to China and other emerging economies. The change was already agreed in 2010 but long held up by the US Congress.
In an interview with the Reuters news agency, Italian Finance Minister Pier Carlo Padoan said Lagarde had earned wide support.
"She was able to use the Fund effectively to help solve difficult situations and crises, not just in Europe," he said, adding that Lagarde should be allowed to continue her "terrific job."
However, Lagarde, a former French national synchronised swimming team member, is facing legal troubles in France, in a case involving alleged favors for a business ally of then-president Nicolas Sarkozy.
Lagarde denies any wrongdoing, and the IMF board has expressed confidence in her at each stage of the legal procedure so far. In recent developments, Lagarde has appealed against a judge's order to stand trial.
Looking ahead at a possible second term, Lagard said in Davos in January that a high priority would be working to integrate China fully into the global market economy. She urged Beijing to provide more clarity about its new exchange rate mechanism, linked to a basket of currencies rather than just the dollar.
She also noted that during her term the reform of the IMF's quota system had increased the lender's war chest. "This trend should continue. The IMF should continue to be large," Lagarde said.
Being nominated as the sole cadidate for IMF directorship will also help her master her next challenge, convincing the IMF board to continue to lend money in Greece's third bailout program.
The IMF executive board is expected to name the next managing director by March 3.
uhe/cjc (AFP, Reuters, dpa)