#Lagarde: IMF has full confidence in Christine Lagarde

The Executive Board of the IMF issued a statement expressing their full confidence in the managing director of the International Monetary Fund (IMF) Christine Lagarde (pictured). Yesterday (19 December) Lagarde was found guilty of negligence for her role in the decision to award €403 million in compensation to the colourful former politician and business man Bernard Tapie; the court’s verdict did not lead to a fine or prison sentence, writes Catherine Feore.

After a meeting following the court's ruling the IMF's Executive Board issued a statement to say that they had taken “recent developments” into consideration. The board pointed to Lagarde’s “outstanding leadership of the Fund and the wide respect and trust for her leadership globally" and held that the court decision would not damage her ability to effectively carry out her duties.

Lagarde announced that she will not appeal the decision to the Cours de Cassation – a final appeal court.

Uncontested in her appointment to a second five-year term at the helm of the IMF in June of this year Lagarde enjoys widespread support from IMF partners. US Treasury Secretary Jack Lew and former chief economist with the IMF Olivier Blanchard among others offered their support and spoke of her rigour and commitment to her role.

Background

The court case relates to Lagarde's time as Finance Minister (2007 - 2011) and a decision she referred to a court of arbitration concerning the controversial businessman Bernard Tapie.

Tapie, a minister under President François Mitterand, sold his majority share in Adidas to Crédit Lyonnais in 1993. It was then sold on to a private buyer for what appeared to be a large profit. Lagarde's decision in 2008 to put Tapie’s claim for compensation to a court of arbitration was seen by some as suspicious. The decision to award compensation was later overruled.

Lagarde’s legal team argued that the case brought against her was politically motivated. They argued that in turning the Tapie case over to a court of arbitration she was following the advice of senior legal advisers within her ministry.

Tapie had thrown his support behind Nicolas Sarkozy in the 2007 presidential election. Tapie’s transference of allegiance from the right to the left was seen as opportunistic and the decision in 2008 to award him compensation of €403m was viewed with cynicism by some sections of the press. It remains to be seen if this judgement will tarnish Lagarde's reputation and prove damaging to the IMF.

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