IMF’s Lagarde wins EU support to become ECB new president

European leaders have agreed on Tuesday to back International Monetary Fund (IMF) Managing Director Christine Lagarde to become the next president of the European Central Bank (ECB).

It was unexpected to witness the selection of Lagarde, not an economist or one of the front-runners to replace Mario Draghi, whose term ends on Oct. 31 and cannot be renewed. She has become a superstar of international finance after serving for eight years as head of the IMF and four as French finance minister.

“In light of this, and in consultation with the ethics committee of the IMF executive board, I have decided to temporarily relinquish my responsibilities as managing director of the IMF during the nomination period.” Lagarde says

The formal approval of Lagarde’s nomination, which requires a series of procedural moves, is expected to arrive in the coming months.

On the third day of a gruelling summit in Brussels, EU leaders gave near-unanimous support for a package based around Lagarde. They also backed the nomination of German Defence Minister Ursula von der Leyen to become the president of the European Commission, the bloc’s executive arm, succeeding Jean-Claude Juncker.

Since the senior EU jobs must reconcile demands from the most powerful members of the bloc, the choice of a German as the top EU official means that France laid claim to the ECB presidency.

Lagarde said she was honoured to have been nominated for the ECB presidency. “In light of this, and in consultation with the ethics committee of the IMF executive board, I have decided to temporarily relinquish my responsibilities as managing director of the IMF during the nomination period.”

Source: The Wall Street Journal & The Financial Times