Lagarde Will Get British Endorsement to Run IMF, Osborne Says

May 21, 2011, 7:22 PM EDT By Gonzalo Vina

May 22 (Bloomberg) -- The U.K. will back French Finance Minister Christine Lagarde to become the next managing director of the International Monetary Fund, Chancellor of the Exchequer George Osborne said, adding to the cascade of European endorsements for her.

Osborne praised Lagarde for her leadership skills during France’s presidency of the Group of 20 and for her “strong” advocacy of countries taking steps to reduce budget deficits. Last week, Osborne had left open the possibility that Britain might endorse a non-European to head the fund.

“On the basis of merit, I believe Christine is the outstanding candidate for the IMF, and that’s why Britain will back her,” Osborne said in an e-mailed statement late yesterday. “Personally think it would be a very good thing to see the first female managing director of the IMF in its 60 year history.”

Lagarde has emerged as the leading contender to replace Dominique Strauss-Kahn at the IMF as developing nations have failed to unite behind one candidate. Strauss-Kahn, who’s also French, resigned on May 19, four days after his arrest in New York on sexual-assault charges.

German Chancellor Angela Merkel yesterday described Lagarde as an “excellent and experienced person” and that consensus was emerging is Europe for her to get the IMF job, Deutsche Presse-Agentur said. Austria may support Lagarde, Finance Minister Maria Fekter said yesterday, according to Agence France-Presse.

Gordon Brown

Osborne’s backing reduces the prospect that former Prime Minister Gordon Brown will get the position. The Financial Times reported last week that Brown, who served as chancellor for 10 years, had told friends he had international backing for his candidacy.

Osborne said in an interview last week that Brown hadn’t asked the British government to support him. This month, Prime Minister David Cameron said Brown might not be the “most appropriate” candidate because the job needs someone who “understands the danger of excessive debt.”

Lagarde’s chances of securing the top IMF role may hinge on how she resolved a two-decade-old dispute involving a supporter of President Nicolas Sarkozy.

France’s Cour de Justice de la Republique, which oversees ministers’ actions in office, has until June 10 to decide whether to investigate if Lagarde abused her powers in agreeing in 2007 to send the case to arbitration. It resulted in a 385 million-euro ($550 million) award to Bernard Tapie, a former Socialist minister who endorsed Sarkozy’s presidential effort.

Lagarde has rejected accusations her decision to take the matter to arbitration and not appeal the award was a reward for Tapie’s support of Sarkozy.

--Editor: Dick Schumacher.

To contact the reporter on this story: Gonzalo Vina in London at gvina@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

View the original article here