Lagarde will keep IMF focus on debt
CBC News
Posted: Jul 6, 2011 10:09 AM ET
Last Updated: Jul 6, 2011 3:22 PM ET
Sovereign debt worries are the most pressing concern for the world economy, IMF head Christine Lagarde says. (Jacques Brinon/Associated Press)
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Sovereign debt worries are the most pressing concern for the world economy, Christine Lagarde said in her first official speech as head of the IMF on Wednesday.
"The most pressing immediate issue is sovereign debt," Lagarde told journalists assembled in Washington D.C.
The IMF provided Greece with a large chunk of the $159 billion bailout package last year, because of fears that a Greek debt default would trigger a wider fallout in the global economy.
Many other European economies seem in danger of needing a similar bailout, and many world leaders have bristled at the prospect of more money for Europe.
"It's much broader than the euro zone," she said. "It's a very broad-based issue that needs to be looked at as a matter of urgency."
Lagarde faced a battery of questions from reporters on Wednesday, eager to hear her first official pronouncement since assuming the top job at the world's dominant financial body.
"I've been on the job for 24 hours, and 18 of them were full of briefing notes," she joked at a question and answer session following her speech.
Many challenges
Lagarde is facing challenges on all fronts. Namely, there is increasing opposition to the prospect of more money for Greece and other European nations, whose financial mess is seen in many quarters as being largely of their own doing.
Lagarde was evasive on the subject of Greece, repeatedly saying that the matter is "under review" and will be discussed with her deputies at a meeting on Friday, the day the fifth instalment of Greece's bailout funds are set to be released.
But she reiterated the agency's belief that what happens to Greece is important for all IMF member nations. "One policy will have ripple effects outside its territory," she said.
In electing a woman to lead it for the first time, the IMF worked to dispel some of the criticisms that it is not open to new ways of thinking. But electing a European did little to dissuade concerns from the developing world that the institution is too focused on the traditional economic powers of Europe and North America and not emerging titans such as India, China and Brazil.
'Governance and quotas must be readjusted to reflect the new architecture of the world'—Christine Lagarde
"The IMF top job has never been in the spotlight like it is now," said Kevin Gallagher, a professor of international relations at Boston University. "She needs to [take off] her French finance minister hat and put on her global financial institutions hat."
Lagarde addressed the issue somewhat, saying simply that "governance and quotas must be readjusted to reflect the new architecture of the world."
Lagarde also deftly avoided all questions surrounding the legal case unfolding against her predecessor, Dominique Strauss-Kahn. The former IMF leader is facing sexual assault charges in New York and Paris, stemming from separate incidents involving a hotel maid and French journalist.
"We will leave it to the legal course that it should take," Lagarde said.
With files from The Associated PressShare Tools
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