May 25, 2011 / 2:52 PM / 7 years ago

Geithner: Lagarde and Carstens "credible" for IMF

WASHINGTON (Reuters) - Treasury Secretary Timothy Geithner on Wednesday said France’s Christine Lagarde and Mexico’s Agustin Carstens are both “credible” candidates to lead the International Monetary Fund, but he wants the candidate who can earn the broadest support.

Treasury Secretary Timothy Geithner sits onstage for an interview with Politico's Mike Allen at the Newseum in Washington May 25, 2011. REUTERS/Jonathan Ernst

“They’re very talented people. Christine Lagarde is an exceptionally capable person, an excellent mix of financial, economic knowledge, talent, and the kind of political skills you need,” he said at a breakfast sponsored by Politico. “Agustin has that as well. We want to see a process where we look to the candidate who can command the broadest support.”

Geithner said the United States will eventually weigh into the decision, but said he believes it is important that the IMF run a “contestable” selection process based on merit and the talents of candidates.

Both Carstens, Mexico’s central bank governor and former finance minister, and Lagarde, France’s economy minister, have put their names up for consideration to replace Dominique Strauss-Kahn, who resigned as IMF chief last week after he was arrested on charges of attempting to rape a maid in a New York hotel. Many have seen Lagarde as the front runner.

Carstens is the first candidate for IMF managing director from an emerging market. The IMF has been run by a European since it was created after World War Two.

Geithner said the United States was working with emerging economies and Europe to make sure the fund’s structure “reflects the balance of power in the world today.”

“Two very credible people now said they’d like to run the institution and there may be others that join them,” Geithner said. “But I think you can look at this now and be much more confident that you’re going to have an open process where people are going to look at the candidate, not just at the most experience and technical capacity, but who can command the most, the broadest base of support.”

Geithner said Strauss-Kahn has not contacted him since his arrest and resignation. The U.S. Treasury boss declined comment when asked if the IMF had an atmosphere where women felt preyed upon by male colleagues when he worked at the Fund from 2001-03, adding that female IMF employees would be better positioned to answer such a question.


At the same event, Geithner refused to admit that the administration was working on a contingency plan to stave off a default if Congress failed to give the U.S. government room to borrow, but vowed that the United States would meet its obligations.

“Our plan is for Congress to pass the debt limit,” Geithner said. “Our fall-back plan is for Congress to pass the debt limit and our fall-back plan to the fall-back plan is for Congress to pass the debt limit,” he said.

The United States has already reached its $14.294 trillion borrowing cap and Congress has until about early August to increase the level before the country becomes unable to pay all its bills.

Geithner said “The United States will never default on its obligations. This country will never put itself in a position where people believe we are not going to pay our bills,” he said.

Reporting by David Lawder, Rachelle Younglai and Lisa Lambert, Editing by Chizu Nomiyama

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