The world's largest emerging economies are challenging European leadership of the IMF. In a joint statement Tuesday, Brazil, Russia, India, China and South Africa, known as the BRICs, said that appointing a European to head the IMF "undermines the legitimacy" of the institution, the FT.com reported.
The BRICs are going up against a tradition that began with the founding of the IMF after World War II, a "gentleman's agreement" that stipulated that a European would head the IMF, while an American would lead the World Bank. The BRICs on Tuesday referred to that understanding as an “obsolete unwritten convention.”
The statement came several hours after the French budget minister and a government spokesman, Francois Baroin, said on Europe 1 that China supported the candidacy of Christine Lagarde, the French finance minister, who is backed by the European Union. Lagarde is expected to announce her candidacy for the post on Wednesday, Reuters said, citing diplomatic sources.
On Monday, the IMF opened up the nomination period for the top job. The former head of the institution, Dominique Strauss-Kahn, resigned from the post after he was arrested in New York over accusations of sexually assaulting a hotel maid, which he denies.
The BRICs will have to come up with a candidate they can jointly support if they intend to challenge the traditional European leadership. So far, FT.com reports, Agustín Carstens, governor of the central bank of Mexico, and Grigory Marchenko, who heads the central bank of Kazakhstan, are the non-European candidates who have entered the race for the IMF top spot.