Brazil Listens to Lagarde But Doesn’t Back Her for IMF Chief

Christine LagardeFrance’s Finance Minister Christine Lagarde pledged to push reforms to give Brazil and other emerging economies more influence at the International Monetary Fund as she kicked off a worldwide tour to win support for her candidacy to lead the global lender.

The backing of Brazil, Latin America’s largest economy and an influential diplomatic power, could help ease discontent among developing countries over the long-standing practice of choosing a European to head the Washington-based IMF.

Brazilian Finance Minister Guido Mantega said Brazil had yet to decide whether to support Lagarde or her only declared rival, Mexican central bank chief Agustin Carstens. But he underscored the need for more reforms to give emerging economies a greater voice in the IMF, something Lagarde was eager to stress she supported.

Lagarde’s comments came as Carstens kicked off his own tour to campaign for the job, starting in Spain where he urged IMF members not to elect a European by default.

Brazilian officials said in private before Lagarde’s visit that President Dilma Rousseff is inclined to back her candidacy as long as she pledges to continue reforming the IMF. They see Lagarde as having more clout to push reforms than Carstens, who arrives in Brazil on Wednesday.

“If I was elected, I’d make sure that the diversity of members is represented at all levels,” Lagarde told reporters at a news conference in Brazil’s capital, Brasilia.

She added that the fund “must continue the reform process it began under Dominique Strauss-Kahn,” who quit as IMF chief after being charged with the attempted rape of a hotel maid in New York in May.

Lagarde, who is a strong favorite to win the post and who France says has the backing of the G8 group of leading economic powers, also said it was important for the IMF to increase international cooperation to avoid excessive currency swings.

Mantega said the crucial qualities for the next IMF head were experience, competence and commitment to reform, and that Brazil would wait for all candidates to present their cases before declaring its support. Lagarde is “certainly a “competent minister,” he said.

“Brazil wants the philosophy of reform to be maintained by the new managing director,” Mantega said after lunching with Lagarde, who also met central bank chief Alexandre Tombini.

The 187-member IMF has approved reforms that will give emerging economies increased voting rights and board seats by the end of 2012. More than 6% of voting power at the fund will shift to developing countries such as China, which will become the third-biggest member nation.

Lagarde’s visit to Brasília is the first in a hastily arranged global tour that will also take her to India, China, Russia and Saudi Arabia. The IMF has a June 30 deadline to pick a successor.

Mercopress

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