G8 summit crunch-time for Lagarde's IMF hopes

European diplomats insist it is not "formally" on the agenda. But it is hard to imagine that Group of Eight (G8) summit in France this week can skirt around the question of who should lead the International Monetary Fund (IMF) after Dominique Strauss-Kahn's fall from grace.
The former French finance minister resigned last week after being arrested on April 14 on sexual assault charges involving a New York hotel maid, just before setting off to Europe for talks on the Greek and Portuguese bailouts. France's current finance minister, Christine Lagarde, has emerged as a front-runner to replace Strauss-Kahn, as European Union nations jockey to retain control over the IMF's top job.
On the weekend, German Chancellor Angela Merkel called Lagarde "an outstanding and experienced personality," while finance minister Wolfgang Schaeuble said, "Europe would have top chances" to secure the IMF post if his French counterpart were to formalise her candidacy.
Britain's Chancellor of the Exchequer George Osborne was equally full of praise. "On the basis of merit, I believe Christine is the outstanding candidate for the IMF, and that's why Britain will back her," he said in a statement. Similar endorsements have come from fellow G8 member Italy and from Luxembourg Prime Minister Jean-Claude Juncker, who as the chair of the Eurogroup panel of eurozone finance minister is seen as an influential voice on international financial matters.
Analysts such as Wolfgang Munchau of the Financial Times say it would make sense to have another European as IMF chief because of the institution's involvement in the eurozone debt crisis, which some fear may take a turn for the worse due to Greece. However, Lagarde's run may be stifled by calls to end the informal transatlantic arrangement that since the Second World War has seen Europeans in charge of the IMF and a US citizen hogging the top job at the World Bank.
"The tradition of automatically appointing a European to the (IMF) role is one that's long past its use-by date, given the shift of global economic weight to emerging economies, particularly in Asia, over the past few decades," Australian Treasurer Wayne Swan said Sunday. His remarks were echoed by South African Finance Minister Pravin Gordhan, while Brazil - another up-and-coming world economic power - has expressed a more nuanced stance.
The country's finance minister, Guido Mantega, has signaled that another European as head of the IMF might be acceptable, as long as the EU-US deal on the IMF and World Bank top jobs is broken in the next years. "There may be good candidates, be they from emerging or advanced countries, even within the European Union. The important thing is that the new director of the IMF follows the reforms that were being carried out by Strauss-Kahn, to democratise the fund," Mantega told the Brazilian daily Folha de Sao Paulo last week.
While the G8 summit in Deauville is expected to offer an opportunity for world leaders to informally settle the issue, the appointment of the next IMF chief is to be made by the institution's board. Combined, EU countries are the largest shareholders within the board, with 31.5 per cent of the votes, but the US is the single-biggest, with about 17 per cent.
On Friday, US Treasury Secretary Timothy Geithner kept his cards close to his chest, saying that his country would "support a candidate with the requisite, deep experience and leadership qualities, and who can command broad support." With that broad consensus still to be forged, Lagarde has been even more tight-lipped. Asked last week if she herself was a candidate, she replied with a smile: "Vive L'Europe!" (Long Live Europe!)