August 16, 2022

In Beijing, Lagarde Backs Bigger Say for China at I.M.F.

BEIJING — Finance Minister Christine Lagarde of France, the top candidate to run the International Monetary Fund, said Thursday that she backed a bigger say for China at the organization while making it clear that the euro zone crisis would be a priority if she wins the job.

Ms. Lagarde made the comments in Beijing, the latest leg of her world tour to seek support for her I.M.F. bid. She is considered the favorite to replace the former I.M.F. chief, Dominique Strauss-Kahn, after he was arrested last month on attempted rape charges.

Ms. Lagarde said her talks with Chinese central bank and Finance Ministry officials about her candidacy were positive, but she stopped short of claiming Beijing’s outright support.

“I’m very positive about my trip to China, but the decision does not belong to me. It belongs to the Chinese authorities,” she said at a news conference at the French Embassy in Beijing.

“I’m confident; I’m very positive about the meetings I’ve had so far. Some governments and some countries have decided to go public early. My sense is that it’s too early to count your chickens, if I may say.”

China has not said whether it supports Ms. Lagarde, but it has joined other big emerging economies in demanding that the I.M.F. and other international financial institutions give greater heed to their demands.

And in Beijing, Ms. Lagarde indicated that she was listening to those demands. She said she backed the decision last fall to increase China’s voting rights at the I.M.F. from 3.65 percent to 6.4 percent, and also said the organization would help Beijing internationalize the renminbi.

An article published on Thursday in a Chinese central bank newspaper said Ms. Lagarde would be good for the I.M.F.’s top job because she is experienced in handling the euro sovereign debt crisis and could offer a fresh image to the agency as a woman.

The front-page story, citing a government researcher, does not necessarily reflect Beijing’s official position. But the prominent position given to the article suggests at least indirect support from the central bank.

After her talks with the Chinese vice premier, Wang Qishan, and the central bank chief, Zhou Xiaochuan, on Wednesday, Ms. Lagarde said that reforms at the I.M.F. should continue to benefit emerging economies.

“The second thing that we also agreed on was that the trends of reforms that has taken place must be continued and must be developed, both in relation to the governance of the fund, in relation to the appropriate representativeness of its members, particularly with those countries that are underrepresented, as is the case with China,” she said.

But Ms. Lagarde also made clear that her priority if she becomes managing director of the I.M.F. will be the euro zone crisis that continues to threaten Greece, Portugal and other European economies struggling to cut gaping fiscal deficits.

“Clearly, it is the immediate focus of the fund’s operations at the moment,” she said.

She urged Greece to emulate Portugal in seeking to form a broad political alliance to push through painful reforms.

Portugal’s prime minister in waiting, Pedro Passos Coelho, has begun formal coalition talks with the rightist CDS-PP party to seek a pact to form a majority government.

“One great strength of Portugal which I hope Greece will be able to emulate is that Portuguese political parties and authorities joined forces and formed an alliance. That was critical,” said Ms. Lagarde.

Ms. Lagarde will travel to Lisbon on Friday to attend the African Development Bank’s annual meeting.

The main obstacle in Ms. Lagarde’s bid is the possibility of a French inquiry into her role in a 2008 arbitration payout.

She also faces opposition from other emerging markets. Agustín Carstens, Mexico’s central bank chief, who is also competing for the I.M.F. post, is due to visit China next week.

Colombia became the first major Latin American nation to publicly endorse Mr. Carstens on Wednesday, calling on others to do the same.

The Colombian Foreign Ministry said in a statement a dozen other Latin American nations now backed Mr. Carstens. The Latin American group includes Venezuela, Bolivia, Peru, Panama, Uruguay, Mexico, Paraguay, Belize, Honduras, Guatemala, the Dominican Republic and Nicaragua, the statement said.

Costa Rica also endorsed Mr. Carstens on Wednesday.

“Colombia expresses support for the aspiration of Agustín Carstens and invites other governments of the Americas to join in backing this bid,” Foreign Minister Maria Angela Holguin said in the statement.

Finance Minister Pranab Mukherjee of India said on Tuesday that the country has not committed to support Ms. Lagarde’s bid despite her visit to the country, a sign that India may still be hopeful of nominating an alternative candidate.

Article source: http://www.nytimes.com/2011/06/10/business/global/10iht-fund10.html?partner=rss&emc=rss

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