Darling of Davos, Lagarde has second IMF term sewn up

Sun Jan 24, 2016 1:38pm EST
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By Paul Taylor

DAVOS, Switzerland (Reuters) - The darling of the Davos political and financial elite, Christine Lagarde has a second term at the helm of the International Monetary Fund sewn up just days after nominations opened, despite facing possible trial in France.

The former French finance minister, regularly listed among the world's 10 most powerful women, used the annual World Economic Forum meeting in the Swiss Alps - an echo chamber for her policy prescriptions - to announce her candidacy and secure instant support from global movers and shakers.

In a gesture of cross-Channel entente, British finance minister George Osborne formally nominated the center-right Lagarde, 60, within minutes of the appointment process opening.

Endorsements quickly followed from France, Germany and Italy, as well as unofficially from the United States, which holds a blocking minority of votes on the IMF's board.

More significantly, China, South Korea and Mexico signaled in Davos they would support Lagarde, ensuring there would be no joint move by the big emerging economies to try to wrest the IMF job from European hands, which have held it since 1946.

"Any rival candidacy would be just symbolic - to put down a marker for the next time," said a senior IMF source. "Everyone has cause to be happy with Lagarde. We don't feel any counter wind."

Whether out of diplomatic courtesy or lack of concern, no government has so far questioned whether she will be able to serve out a second term without being distracted by her legal troubles in France.

Lagarde has said she will appeal against a judge's order that she stand trial in a case involving alleged favors for a business ally of then President Nicolas Sarkozy. She denies wrongdoing and the IMF board has expressed confidence in her at each stage of the legal procedure so far.   Continued...

Christine Lagarde, Managing Director of the International Monetary Fund (IMF) attends the session "The Global Economic Outlook" during the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland January 23, 2016.  REUTERS/Ruben Sprich