Mexican central bank chief Agustin Carstens is making a last-ditch effort to win Brazil's endorsement for IMF managing director following French finance minister Christine Lagarde's visit on Monday. Insiders tell Reuters that the Brazilian government favors Lagarde and the country's local financial newspaper, Valor Economico, reported today that officials will endorse her, though it didn't reveal its sources. Losing the support of South America's largest economy would be a major blow to Castens, who arrived there today and is already perceived as an underdog. Adding to Lagarde's air of inevitability, Russian deputy finance minister Sergei Storchak told Bloomberg that Lagarde has no real competition from emerging economies candidates. "We're in the strange situation of having another European in line for this job, but a European whose personal and professional qualities make her almost impossible to compete with," he told the news wire on Tuesday. "She has the right background, perfect English and the ability to lead negotiations."
In his bid to persuade Brazil, Carstens will try to "capitalize on discontent in Brazil and other major emerging economies over the practice of choosing a European to head the global lender," reports Reuters. Lagarde reportedly promised Brazilians she would rebalance member-nation representation at the IMF in favor of emerging economies--a pledge some Brazillians think she has the necessary clout to deliver on. Meanwhile, a Tuesday op-ed in The Washington Post by Sebastian Mallaby argues fervently against Lagarde's nomination on grounds that she would compromise the IMF's independence.
"If another French managing director is the wrong choice in terms of the IMF's legitimacy, it would also damage the institution's independence," he writes. "Over the past year, the IMF has compromised itself in Europe, supporting bailouts in Greece and Ireland that are not going to work. Perhaps because its last leader, Dominique Strauss-Kahn, aspired to become president of France, it was too willing to abet the German and French governments as they fudged the big choice before them: Either the European countries in crisis must wipe out unpayable debts by defaulting or they must receive far more generous bailouts. The IMF's next managing director needs to explain this dilemma without flinching, even if Europe's establishment does not want to hear it. But as France's finance minister, Lagarde has been at the center of Europe's failed handling of the crisis. She is the last person one would turn to for fresh and independent advice."