International Monetary Fund chief Christine Lagarde submitted her resignation from the global crisis lender on Tuesday, citing more clarity about her nomination to lead the European Central Bank as European legislators approved a new top bureaucrat.
Lagarde said in a statement her resignation was effective Sept. 12, firing the starting gun for the IMF’s search for her successor, which is likely to be another European.
“With greater clarity now on the process for my nomination as ECB President and the time it will take, I have made this decision in the best interest of the Fund,” Lagarde said in a statement.
She said her resignation would expedite the selection for the next head of the IMF.
IMF succession is expected to be a major topic of discussion among G7 finance ministers and central bank governors meeting on Wednesday and Thursday in Chantilly, France, near Paris amid concerns that slowing global growth and trade conflicts will pressure vulnerable economies.
Lagarde’s resignation, first reported by Reuters, came two weeks after her nomination on July 2 for the ECB’s top job. She did not immediately quit the IMF because of uncertainty over whether the new European Parliament would support her and other new EU leadership positions, sources told Reuters.
Her nomination was part of a package of top officials agreed by EU governments that included German Defense Minister Ursula von der Leyen as European Commission president, who drew Green party opposition.
Later on Tuesday, von der Leyen was approved by the European Parliament in a 383-327 vote.
The European parliament will hold a nonbinding vote on Lagarde’s appointment, which is expected to be finalized by EU leaders at a regular summit on Oct. 17-18.
Since its creation at the end of World War Two, the IMF has been led by a European, while its sister institution, the World Bank, has been led by an American. Analysts say the “duopoly” is likely to continue after U.S. President Donald Trump’s nominee, David Malpass, was approved in April to lead the World Bank with European support.
Finance leaders of Europe’s four largest economies Germany, France, Britain and Italy will participate in the G7 finance meeting this week in Chantilly, along with other large IMF shareholders the United States, Japan and Canada, giving weight to discussions on IMF leadership.
On the sidelines of the G7 meeting, Bank of England Governor Mark Carney, considered a leading candidate to replace Lagarde, is slated to meet with U.S. Treasury Secretary Steven Mnuchin, who wields strong influence over the IMF’s leadership.
The United States holds an effective veto over major Fund decisions, with a 16.52 percent share of its voting power.
While Carney, 54, is a Canadian economist, he holds Irish and British passports and has led Britain’s central bank since 2013 and chaired the Financial Stability Board, an international body, for seven years.
Other names being floated include Bank of Finland Governor Olli Rehn, as well as ECB executive board member Benoit Coeure.
Kristalina Georgieva, a Bulgarian national who is currently chief executive officer of the World Bank, has been seen as having an outside chance, according to some IMF sources.
Two IMF board sources said there was concern among some IMF member countries that the Fund’s IMF leadership would be left in limbo due to the long ECB confirmation process, and it was better for her to resign to accelerate the succession process.
The IMF’s acting managing director, David Lipton, said earlier on Tuesday that the fund would adapt to Lagarde’s departure as it has other developments over 75 years.
A former French finance minister, Lagarde was the first woman to head the IMF and was known among policymakers as a tough negotiator. She was a tireless advocate for the benefits of trade, global growth that aids the poor and middle classes, and the empowerment of women.
Her second five-year term as head of the IMF was not due to end until July 2021. Traditionally, the post has always been held by a European, while the head of the IMF’s sister organization, the World Bank, has always been an American since the institutions were created at the end of World War Two.
If approved, Lagarde would take over as ECB president from Mario Draghi on Oct. 31. While her confirmation could be lengthy, it is likely to be largely a formality as long as the euro zone’s biggest member states – Germany, France and Italy – are in unity.
Her immediate challenge at the ECB would be to overcome her shortcomings in monetary policy-making, especially as it seeks to rearm for a potential new slump after years of using unconventional policy tools to stimulate inflation and growth.
As head of the IMF, she has had some battle-testing, bringing stability to the euro zone debt crisis of the last decade and presiding over large bailouts for Argentina, Egypt and Ukraine. She has emphasized the need for the IMF to maintain its $1 trillion in lending firepower to deal with any future crises.
William Barr made it clear this week that he’d sign off on a sham investigation into the Dems’ 2020 nominee
Welcome to another edition of What Fresh Hell?, Raw Story’s roundup of news items that might have become controversies under another regime, but got buried – or were at least under-appreciated – due to the daily firehose of political pratfalls, unhinged tweet storms and other sundry embarrassments coming out of the current White House.
A perfect storm propelled New York's sleaziest real estate developer to an Electoral College victory in 2016 despite winning three million fewer votes than his opponent, but Nate Silver made a compelling argument that the letter James Comey sent to Congress just 11 days before Election Day announcing that the FBI was re-opening its probe into Hillary Clinton's emails was decisive.
Bill Barr is serving notice to DOJ officials that he’ll ruin them if they investigate Trump: MSNBC host
An MSNBC discussion about Bill Barr running interference within the Justice Department for Donald Trump ended with "AM Joy" host Joy Reid suggesting that the attorney general's very public "media blitz" over the so-called "Horowitz Report" is a warning shot to anyone in the DOJ who thinks about investigating the president.
As Reid explained it, "He did a whole TV blitz to basically say that his own agency, the FBI, was spying on the Trump campaign, something that the inspector general said did not happen."
Reid took that to its logical conclusion.
"Now he’s saying, ‘Well, I’ve got a different report that’s going to find the motivations’ that he’s basically saying are bad motivations by people in the FBI. And if you’re that FBI agent and then you hear that Donald Trump may be again looking for foreign help and maybe again getting help from Russia or forcing help from Ukraine, what do you do?" she asked. "Would you then not be concerned that, should you go ahead and investigate foreign interference in our election, that William Barr may come after you?"
Stefanik voters turning on GOP lawmaker after she threw away her credibility to defend Trump
Over the course of the impeachment hearings, Rep. Elise Stefanik (R-NY) has gone from a relative backbencher who sells herself as a moderate to voters in Upstate New York, to a theatrical partisan grandstanding for President Donald Trump and a top target of ire from Democrats.
But according to Politico, at least some of her voters appear turned off by her new stance.
"While Stefanik once able to strike a delicate balance between her Republican identity and her positions on issues like climate change, some think those earlier convictions are gone, like Phillip Paige, a former Stefanik backer and a member of SUNY Potsdam’s College Republicans," wrote Politico's Anna Gronewald. "A native of the 21st district’s Madrid, New York, Paige said he started to lose faith in Stefanik when she began supporting Trump as the party’s nominee in 2016. Paige supported John Kasich’s candidacy in that election. 'A lot of her boots-on-the-ground young Republican crowd has really become quite disillusioned,' he said. 'We saw her as what we thought the future of the Republican Party was and that really has been disproven. Unless, maybe the future of the Republican party is Donald Trump.'"