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Christine Lagarde resigns as head of IMF

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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.

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“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.

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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.

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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.

Vetting candidates

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.

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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.

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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.

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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.

Inclusive legacy

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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.

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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.

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… then let us make a small request. Like you, we here at Raw Story believe in the power of progressive journalism — and we’re investing in investigative reporting as other publications give it the ax. Raw Story readers power David Cay Johnston’s DCReport, which we've expanded to keep watch in Washington. We’ve exposed billionaire tax evasion and uncovered White House efforts to poison our water. We’ve revealed financial scams that prey on veterans, and efforts to harm workers exploited by abusive bosses. We’ve launched a weekly podcast, “We’ve Got Issues,” focused on issues, not tweets. Unlike other news sites, we’ve decided to make our original content free. But we need your support to do what we do.

Raw Story is independent. You won’t find mainstream media bias here. We’re not part of a conglomerate, or a project of venture capital bros. From unflinching coverage of racism, to revealing efforts to erode our rights, Raw Story will continue to expose hypocrisy and harm. Unhinged from corporate overlords, we fight to ensure no one is forgotten.

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2020 Election

Democrats could flip the Texas state house in 2020 — and reshape the national map

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Blue Texas? Democrats have long dreamt of winning Texas’s 38 electoral votes in the presidential election. That may still be a long shot, but a recent “Texodus” from Congress has given new talk to a political transformation across the Lone Star State that could have massive ramifications down the ballot and for decades to come.

This article was originally posted at Salon.

Four of the state’s GOP members of Congress have announced their retirements in recent weeks, an unusual torrent of departures signaling that a storm is coming. And evidence shows that it’s not just hitting Texas’s federal delegation. It’s coming to Austin, too.

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‘There’s an awful lot of really good Republicans out there’: Joe Biden at Cape Cod fundraiser

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Former Vice President Joe Biden defended Republican lawmakers in DC as "decent people" during a campaign fundraiser held at Cape Cod.

"There’s an awful lot of really good Republicans out there," Biden argued, according to Washington Post reporter Matt Viser.

"I get in trouble for saying that with Democrats, but...every time we ever got in trouble with our administration, remember who got sent up to Capitol Hill to fix it? Me," he said.

”Because they know I respect the other team. I do. They’re decent people," Biden claimed. "They ran because they care about things, but they’re intimidated right now.”

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Neo-Nazi ‘Atomwaffen Division’ holding live-fire militia trainings at ‘The Base’ near Spokane: report

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One sign of the growing white nationalist crisis in America is a new outreach effort for paramilitary training.

"A neo-Nazi group focused on providing paramilitary-style training to far-right extremists has been conducting a massive recruitment drive and claims to have already conducted live-fire training with its members," Vice News reports.

"The Base, which is connected to extreme-right groups the Atomwaffen Division and the Feuerkrieg Division, has been promoting its growth on social media with photos announcing its presence in major cities across North America, including New York, Los Angeles, and Seattle, and in Europe, South Africa, and Australia," Vice reported. "The images often include a small contingent (typically one to three) of masked, camo-clad men holding weapons standing in front of The Base's flag, a black flag with three white lines running down the centre."

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