Christine Lagarde visited Brazil on Sunday to buoy her candidacy for the IMF’s top post. At a press conference Lagarde stated: “I will ensure that the Fund represents the diversity of all its members.’’ She went on to indicate that a European should not automatically head the IMF. Perhaps this should be the last time? The first problem with the tradition is that before the arrest of “DSK” EU leaders had conceded that the tradition needed to fall by the wayside. As the Economist recently put it:
They said that they were “concerned” with utterances in Europe that the position of managing director should continue to be occupied by a European, reminding everybody that Jean-Claude Juncker, the president of the Euro Group, said in 2007 that “the next managing director will certainly not be a European” and that “in the Euro Group and among EU finance ministers, everyone is aware that Strauss-Kahn will probably be the last European to become director of the IMF in the foreseeable future.”
A second, almost hilarious charge from Lagarde’s supporters is that a European is somehow best equipped to tackle Europe’s roiling debt crises. Consider that in light of this riposte: “imagine the laughter if somebody had made the same argument for Argentina’s finance minister in the 1980s or Thailand’s in 1997.”
Agustin Carstens is expected to visit Brazil later this week. For its part, the Brazilian government has waffled since first indicating that it had doubts about the “orthodox” Mexican banking chief. Not wanting to prejudge the candidates before they all had a chance to make their case, Brazil has insisted it remains open minded. Truth be told, a more plausible explanation is that the Brazilians realized they could have more clout by appearing undecided on who to support. It is likely to be another month before we found out who the next IMF chief will be.
If Christine Lagarde is appointed managing director it will prolong two petty traditions: a European as IMF chief, and a rivalry between Latin America’s two economic heavyweights.