Lagarde favourite for IMF as Mexican enters fray

Agustin Carstens (left) and Dominique Strauss-Kahn Mr Carstens (left) is the first non-European to throw his hat in the ring after Mr Strauss-Kahn's departure

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Mexico's finance ministry has said it will nominate the country's central bank boss, Agustin Carstens, to head the International Monetary Fund (IMF).

France's finance minister, Christine Lagarde, is favourite to take the job.

However, Mr Carstens may hope to benefit from a backlash among developing countries against Europe's historic domination of the position.

The previous head - Frenchman Dominique Strauss-Kahn - quit last week to fight sexual assault charges in New York.

The Mexicans' announcement on Sunday came a day ahead of the formal opening of nominations, with a deadline of 10 June set by the IMF for all candidates to be put forwards.

A shortlist of three will then be drawn up over the following week, from which the Fund's executive board will choose the new head by 30 June.

'Undermined'

Mr Carstens was deputy managing director at the IMF up until 2006, and before that, represented Mexico, Spain, Venezuela and Central America at the Fund.

The Mexican finance ministry said their man had "the abilities and qualifications needed to lead an institution of the relevance of the International Monetary Fund".

South Africa and Australia have said the next managing director of the International Monetary Fund should be appointed on merit and not nationality.

The body has always been headed by a European, and the pair say the current appointment system undermines the IMF's legitimacy.

"For too long, the IMF's legitimacy has been undermined by a convention to appoint its senior management on the basis of their nationality," Australian Treasurer Wayne Swan and South African Finance Minister Pravin Gordhan said in a joint statement.

"In order to maintain trust, credibility and legitimacy in the eyes of its stakeholders, there must be an open and transparent selection process which results in the most competent person being appointed as managing director, regardless of their nationality."

Possible IMF successors

IMF frontrunners

There is a range of possible contenders for the top job at the International Monetary Fund. Find out about some of them

Christine Lagarde

Christine Lagarde

French finance minister

France

French Finance Minister Christine Lagarde, 55, looks like the leading candidate with backing from France, the UK and Germany. A flawless English speaker, she was voted best finance minister in Europe by the Financial Times in 2009. However, her nationality may count against her as several IMF chiefs have been French.

Agustin Carstens

Agustin Carstens

Governor Bank of Mexico

Mexico

Mr Carstens, 52, is to be nominated by the Mexican finance ministry. He has spent most of his career as an economic policymaker in his home country, becoming governor of the Bank of Mexico in January 2010 after previously serving as the bank's chief economist. He had a successful stint at the IMF from 2003 to 2006.

Trevor Manuel

Trevor Manuel

Ex Finance minister

South Africa

Mr Manuel, 55, is well-respected in global financial circles, having served as finance minister of South Africa from 1996 to 2009. Born in Cape Town under apartheid, he was imprisoned repeatedly by the South African government for political activities in the late 1980s. He has yet to announce his intention to run.

Tharman Shanmugaratnam

Tharman Shanmugaratnam

Finance minister/deputy prime minister

Singapore

The 54-year-old has been the country's finance minister since 2007 and on Wednesday added the new job of deputy prime minister. With degrees from the London School of Economics and Harvard. He recently became the first Asian to hold the post of chairman of the IMF's policy advisory committee.

Montek Singh Ahluwalia

Montek Singh Ahluwalia

Economic adviser to India's PM

India

Mr Ahluwalia, 67, is an influential economic adviser to Indian Prime Minister Manmohan Singh and has been a key figure in the country's economic reforms from the mid-1980s onwards. He supports open markets and has pushed the government to end fuel price controls and remove barriers to foreign business. His age may count against him.

Peer Steinbrueck

Peer Steinbrueck

Former German finance minister

Germany

Mr Steinbrueck, 62, is a long-shot to become IMF chief, in part because he alienated allies of Germany with his fiery rhetoric while serving as finance minister in conservative Chancellor Angela Merkel's "grand coalition" from 2005 to 2009. He also alienated the United States by openly blaming it for the global financial crisis.

Axel Weber

Axel Weber

Former head of Bundesbank

Germany

Mr Weber, 54, stunned Europe by announcing in February that he would be stepping down early from his post as head of the German central bank, the Bundesbank. Like Mr Steinbrueck, Mr Weber has a reputation as a loose cannon. Both Germans' chances may have been sunk by their government's support for Ms Lagarde.

Gordon Brown

Gordon Brown

Former UK Prime Minister

British

The 60-year old former UK prime minister and finance minister has long been seen as a candidate for the IMF job or another big international financial post. But his successor David Cameron - whose support he would need - has dismissed him as a "deficit denier", adding that it was time to look beyond Europe.

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The duo are co-chairs of the G20's (Group of 20 leading rich and developing countries) IMF Reform Working Group.

Emerging economies have been calling for an end to Europe's traditional grip on the IMF leadership post.

Former South African finance minister Trevor Manuel also has been raised as a possibility, although he has yet to throw his hat in the ring.

'Distinguished'

European leaders appear to be rallying behind Ms Lagarde as a common candidate, with the Dutch government becoming the latest to endorse her on Monday.

The British chancellor, George Osborne, said Ms Lagarde would be elected on a "merit-based candidacy, as she's been an outstanding finance minister and has chaired the G20 finance ministerial meetings this year in an effective and consensual way".

More significantly, Germany has also voiced support, seemingly ruling out the chances of two mooted German contenders - Finance Minister Peer Steinbrueck, and former Bundesbank head Axel Weber.

BBC Berlin Correspondent Steve Evans says Ms Lagarde has now also been endorsed "by the two people who matter in the German government".

Christine Lagarde If given the job, Christine Lagarde would become the IMF's first female leader

Chancellor Merkel said Ms Lagarde was "distinguished" and "very experienced", and the finance minister, Wolfgang Schaeuble, told the Bild on Sunday newspaper that she was "outstandingly qualified" and "extremely respected and appreciated in the entire financial world."

Mr Schaeuble told the German newspaper: "The US and Europe pay by far the biggest share of the contributions.

"It's like in a publicly traded company: Those who hold the majority of shares will also get to name the chairman."

However, some have raised concerns that Ms Lagarde may face imminent legal issues of her own.

She faces a possible investigation of her role in sending to arbitration a 385m euro ($539m; £335m) payment settlement from the government to businessman Bernard Tapie in 2007.

The French court of justice is to decide by 10 June - the same day as the close of nominations for the IMF - whether to launch an investigation against Ms Lagarde for abuse of power.

Voting rights

Mr Strauss-Kahn was the fourth Frenchman to have held the IMF's top job.

He is in New York on bail awaiting trial for sexual assault and attempted rape, charges he denies.

In their statement Mr Swan and Mr Gordhan said G20 leaders wanted to reforming international financial institutions, including the IMF and the World Bank.

Developed industrialised countries currently control about 57% of the voting rights in the IMF, compared with about 43% for developing nations.

With the recent emergence of Brazil, Russia, India and China, many other global figures - including the head of the Organisation for Economic Co-operation and Development - had also called for the IMF job to go to a non-European.

The appointment is usually decided unanimously by the IMF's executive board, although a majority vote by the board would be enough to choose the winner.

Representatives of countries that have served as IMF chief

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