Press Release: Statement by Christine Lagarde to the IMF Executive Board
IMF News, June 23, 2011
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Bibliographic details
- Published: June 23, 2011
Context and procedural details
- Press Release No. 11/253
- Date of statement: June 23, 2011
- Audience: IMF Executive Board
- Candidate status: Christine Lagarde, candidate for the position of the Managing Director of the International Monetary Fund (IMF)
Candidate's framing of the Managing Director role
- Three key duties of a MD:
- Duty 1: Chairing the Board
- Value of a permanent resident Board; Board legitimacy is essential to Fund action.
- Proposes a Board retreat before the recess to lay foundations of trust and respect.
- Duty 2: Managing the staff
- Staff described as the Fund's key asset; staff independence must be protected.
- Acknowledges "recent events have left open wounds" and "John's departure" creates a gap.
- Emphasizes restoring staff pride, integrity, work ethics, and building an integrated, coherent senior management team to overcome "silo-mentality", achieve diversity, and gain cohesion and coherence.
- Calls for focusing on serving the membership and the Fund's higher goal rather than being inward-looking.
- Duty 3: Representing the institution and bringing a vision
- MD must lead by example consistent with values of integrity, independence, and discretion.
- MD shall be the loyal and strong voice of the whole membership, speaking the truth to members, "be them small or large."
Direction and priorities for the Fund (next five years)
- Overarching objective: continuously prove and improve the Fund's legitimacy and effectiveness.
- Assessment of recent history:
- Under Dominique Strauss-Kahn's leadership, the Fund "repositioned itself at the centre of the global economic and financial system" and learned from the recent financial crisis.
- Key principles to lead the Fund:
- Relevance
- Maintain the Fund's pivotal role in global economic and financial cooperation.
- Open to work on changes to the legal framework of surveillance such as the "2007 surveillance decision" or explore changes to the Articles of Agreement.
- Responsiveness
- Enhance capacity to respond to members' needs, with special dedication to the most vulnerable, "thinking of the low-income countries, especially those in Africa."
- Coordination with partners, including the World Bank, is "decisive."
- Tougher, more effective, and more consistent surveillance
- Improve integration of financial sector expertise into surveillance, cooperating with the Financial Stability Board and other relevant bodies.
- Strengthen multilateral surveillance by addressing global interdependencies; proposes that "spill-over reports should become a permanent surveillance tool."
- IMF surveillance should factor in structural and public finance issues, as well as social and employment policies.
- Advocates for a consolidated multilateral surveillance report (pushed at the last IMFC).
- Sufficient resources and adequate tools
- Require delivering on commitments made by member countries.
- Need better leveraging of Fund resources, notably through enhanced cooperation with regional financial arrangements.
- Ensure Fund capacity to address systemic shocks.
- Increased legitimacy
- Implement promptly the historic governance reform agreed last year; France has shown leadership.
- Commit to continuously adapt representation of the Fund, "in particular quotas, to changing economic realities."
- Notes "some milestones are coming up in the near future, and they have to be met."
- Diversity and team work
- Nurture staff dedication and expertise while ensuring equal opportunities and diversity: gender-wise, academic and geographic.
- Cites IEO report: "In-breeding leads to group-thinking and 'silo mentality' leads to underperformance."
- Asserts diversity will strengthen legitimacy and reinforce effectiveness.
Specific issues addressed by the candidate
- Selection process (Number 1)
- Advocates "an open, transparent and merit-based selection process" to allow a large consensus.
- Emphasizes the Fund "belongs to no one but its 187 member states."
- States being French and being European "should be neither an advantage nor a handicap."
- Representing Europe (Number 2)
- Declares she is "not here to represent the interest of any given region of the world, but rather the entire membership."
- Reiterates the Managing Director's "exclusive duty of loyalty to the Fund."
- Conflict of interest (Number 3)
- Notes that "Precautionary or disbursing Fund programs are in place in all regions of the world."
- Argues that excluding candidates on the basis of nationality would "significantly narrow the scope for eligibility for candidacy" and is "impossible to 'operationalize'."
- Observes that such a rule would eliminate current candidates even though "France has no arrangement with the IMF."
- Describes her role in negotiating the economic governance package in the euro-zone and implementing support programs in Greece, Ireland and Portugal; views this as building a strong partnership with the EU.
- Commits that if elected she will ensure "full consistency with the Fund’s mission and providing for good stewardship of the Fund’s resources" when providing support to a euro-area member.
- Affirms she "will not shrink from the necessary candor and toughness in my discussions with the European leaders."
- States "There is no room for benevolence when tough choices must be made" and emphasizes needed adjustments by Greek authorities to restore fiscal sustainability and competitiveness.
Personal credentials and commitments
- Presents herself as:
- "a woman, hoping to add to the diversity and balance of this institution."
- "former head of an international law firm with a dedication to integrity, to the highest moral standards and a belief in participative management."
- "a Finance minister who has been tested in times of crisis."
- "a former Chair of the European Union Ecofin Council and of the G20 Finance Meetings, with a widely-recognized track record and acknowledged leadership abilities."
- Pledge if entrusted as MD for "the next five years":
- Build a Fund adapted to a changing world; "responsive, ready and able to meet all challenges, both foreseeable and unforeseeable."
- Ensure the Fund is "cooperative, listening and coordinating effectively with all stakeholders, and continuously striving to build consensus."
- Strive for a Fund that is "legitimate and even-handed, to reflect a changing world."
Press Release: Statement by Christine Lagarde to the IMF Executive Board (June 23, 2011).