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The Multilateralist

Lagarde opposes ‘benevolence’ in IMF lending

The European candidate for the IMF head, France’s Christine Lagarde, gave her sales pitch to the IMF’s executive board yesterday. While most observers have declared the race over, Lagarde was taking no chances. She was at pains to demonstrate that she would not give any special favors to the European states with IMF loan packages: ...

The European candidate for the IMF head, France’s Christine Lagarde, gave her sales pitch to the IMF’s executive board yesterday. While most observers have declared the race over, Lagarde was taking no chances. She was at pains to demonstrate that she would not give any special favors to the European states with IMF loan packages:

I will not shrink from the necessary candor and toughness in my discussions with the European leaders, on the contrary. There is no room for benevolence when tough choices must be made, and there is no option that does not start with difficult but necessary adjustments by the Greek authorities to restore the sustainability of public finances and to rebuild the country’s competitiveness.

These comments were no doubt aimed at the emerging and developing economies, whose leaders have expressed concern that the Fund is applying different standards to Europe than it does to the rest of the world. But the odd result is that Lagarde is now on record as supporting tough loan conditionality with no room for benevolence–not something that the poorer countries have traditionally supported. 

 Twitter: @multilateralist

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