IMF′s Lagarde to run for second term | Business| Economy and finance news from a German perspective | DW | 22.01.2016
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IMF's Lagarde to run for second term

Christine Lagarde has stepped up to defend her throne at the influential International Monetary Fund. She has the backing of some of the world's most powerful leaders, but could her legal trouble torpedo her candidacy?

A day after drawing strong endorsements from Germany, Britain, France and the Netherlands, Christine Lagarde on Friday announced that she would run for a second term as head of the powerful International Monetary Fund (IMF).

"Yes, I am running for a second mandate," the former French finance minister confirmed in an interview with France 2 television.

With Lagarde's first term coming to an end in July, the IMF on Thursday formally began accepting nominations for who will guide the global crisis lender for the next five years.

"Almost embarrassing"

Within hours, Western leaders - many of whom were gathered at the World Economic Forum in Davos - began pouring praises on the 60-year-old IMF chief, who took up the reins of the influential economic institution in 2011 and has since commanded deep respect for her role in shepherding Europe through one of its most challenging economic times since World War 2.

"I've had the honor of receiving support since the opening of the [IMF's nomination] procedure," she said in the interview with French TV. "The words of the US Vice President (Joe Biden) the other day...were very glowing - almost embarrassing," she blushed, recounting the notoriously free-spoken vice president's public display of adoration on Thursday in Davos.

US Treasury Secretary Jack Lew also expressed strong approval of her performance, but refrained from a full-on endorsement: "I think she has done a great job," Lew said in Davos.

"I think it is difficult for the United States to do much more at this stage," Lagarde told France 2, pointing out that Washington - also the home of the IMF - usually waits until the end of the election process before backing a candidate.

"Vision and acumen"

In Europe, Lagarde's management of the Greek debt crisis in particular has won her the loyal support of several key leaders.

British Finance Minister George Osborne tweeted:

But in Greece, her insistence on austerity as the best medicine against Athens' economic ailments has made her one of the most vilified figures in recent times. Delivering a symbolic victory to her critics - chief among them, leftist Prime Minister Alexis Tsipras - the IMF last summer admitted that it had underestimated the adverse effects the tough austerity measures had had on Greece's economic recovery.

Watch video 01:49

Tsipras and Schäuble at odds in Davos

Uncontested, but no victory guaranteed

So far, Lagarde appears uncontested, with no challenger having thrown their hat in the ring. Still, her election is far from guaranteed as she faces a potentially damaging investigation in France over her role in a banking scandal that predates her arrival at the IMF.

Last month, France's Court of Justice of the Republic placed her under formal investigation in the long-running affair of former Adidas boss Bernard Tapie, who received a large state payout for his dispute with a state bank during Lagarde's tenure as finance minister.

Lagarde has vowed to fight the court's decision, which her lawyer described as "incomprehensible." In Friday's interview with France 2, she said she had "acted in the interest of the state, conforming to the law" and that her conscience was clear.

"I hope that the justice authorities, at the end of the procedure - as long and painful as it is - will agree," she added.

For now, Lagarde enjoys the full support of the IMF executive board. Whether that will last as the case unfolds remains to be seen.

The IMF will be accepting nominations through February 10, and expects to make a decision by March 3.

pad/uhe (AFP, dpa)

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