The International Monetary Fund has appointed Christine Lagarde for a second term as managing director after she rebuilt the Washington-based organisation’s reputation following the sex scandal that engulfed her predecessor.
Lagarde, 60, who was the only candida
te, was backed by the UK, Germany, China, and her home country, France, to stay on for another five years.
She has led the IMF since 2011 and proved a strong contrast to her predecessor,Dominique Strauss-Kahn, who was forced to resign after he was accused of attempted rape in a New York hotel. The allegation was later dismissed.
During her first term, Lagarde won praise from developing countries for providing greater practical support for their efforts to recover from the financial crash and backing their demands for greater representation on the IMF board.
But the former French finance minister has clashed with the US Congress over its refusal to back reform and for her remarks in 2013 after the Obama administration was forced to implement spending cuts, which she considered “excessively rapid and ill-designed”.
Her reputation in Greece has also been battered by years of disputes over the country’s financial bailout, which the leftist Syriza government believes has brought the nation to its knees. The IMF’s latest rescue mission runs out at the end of the month, by which time Greece is expected to make swingeing cuts to pensions, possibly sparking another dispute.
The organisation’s executive board said her second term, which will start on 5 July, was the result of a “consensual” decision. It sidestepped concerns thatLagarde’s upcoming trial in France will prove a distraction during her second term. She will defend an accusation of negligence over a €400m (£310m) payout to businessman Bernard Tapie, who supported Nicolas Sarkozy in France’s 2007 presidential race.
The dean of the board, the Russian Aleksei Mozhin, said: “In taking this decision, the board praised Ms Lagarde’s strong and wise leadership during her first term. During turbulent times in the global economy, Ms Lagarde strengthened the Fund’s ability to support its members with policy advice, capacity building, and financing.
“She has also played a critical role in revitalising the Fund’s relations with its global membership, including its emerging market and developing members.”
Lagarde said: “The global economy is undergoing a number of important transitions and we are focused on helping our membership navigate these successfully. The Fund remains committed to its fundamental goal of helping to ensure global economic and financial stability through international cooperation.”