Met emergency yesterday in Washington, the IMF’s executive board has given him a net of support, expressing his “full confidence” in its ability to perform its functions.
Christine Lagarde remained director-general of the international monetary Fund (IMF). The board of directors of the monetary institution has decided to do so after having been informed of the verdict puzzling that the former minister is the subject. The IMF has for mission to give lessons of governance to its 147 member countries. However, the Court of justice of the Republic establishes that Christine Lagarde, eight years ago, is found guilty of a negligence which cost $ 404 million euro to the French public.
so far, 24 members of the council who represent the countries that fund’s shareholders expressed their “full confidence in the ability of the director-general to continue to discharge its functions effectively”. “Respect” and “trust widely granted in the world,” Christine Lagarde quoted in the press release as “the board” which is specially-convened Monday afternoon in Washington to decide the future of the former French minister.
Lagarde sustained in the last 5 years
In fact, it would have been particularly difficult for the fund to decide otherwise. The european countries collectively still weigh heavy within the board of directors. Pushed by the efforts of France, which contributes only 4% of the capital of the IMF, they continue to support Christine Lagarde. This last, in place since 2011, has seen its five-year mandate renewed in advance in February. A decision then that since its application to the management of the fund, the grande dame has shown a total transparency with the administrators on this old case. So that’s at least five years, the directors consider that the involvement of Christine Lagarde is not of a nature to prevent him from doing his work. He has not changed his mind since yesterday. “His career is now entâchée of a grey mark. For those who don’t like it, the question may be raised…But I think she is still very respected,” says Edwin Truman of the Peterson Institute for International Econo mics.
so Nothing to do with the facts scabrous levelled against his predecessor, and the other minister of france, Dominique Strauss-Kahn, who was imprisoned in New York in 2011 and had to resign, due to the lack of concretely fulfil its task.
But even if the council had considered the sentencing of Christine Lagarde sufficiently disgraceful to ask the latter to put an end to his second term, his quick replacement would have caused a lot of problems. First, because the emerging countries are demanding that one of their number was appointed to the position of managing director of the IMF. Since the creation of the monetary institution, the european, in fact, have exclusively occupied the function. And the governments of the countries young people, and industrialized understood in 2011 that they promised that Christine Lagarde would be the last european to enforce this tradition seems to be an age of colonialism.
Then, because the financial crisis is far from resolved, especially in the euro zone. The IMF can only afford a few months of floating, while the Italian banking system is fragile, while the european central Bank is obliged to pursue a policy of ultra-generous to avoid a relapse into recession.
Finally, because the question of the selection of a successor would have arisen at the worst possible moment: that is to say that Donald Trump is the new leader and a populist, protectionist, arrives at the white House. The nationalist philosophy of the future u.s. president is hardly compatible with the tradition multilateralist, and free trade of the IMF. The issue of financial support of the United States at the IMF, therefore, will pose even more serious in the coming months. In this context, it is better for the management of the fund is firmly in place.