The new head of the International Monetary Fund used her first press conference to pledge to make the institution more diverse and warn of the dangers of Europe’s debt crisis spreading.
Christine Lagarde, who took office on Tuesday, avoided direct questions about the debt crisis in Greece. But she compared the situation in Europe to Lehman Brothers, the bank that collapsed at the start of the credit crisis meltdown. “It doesn’t hurt to anticipate consequences of any of the measures being considered. I think we’ve been burned once, better be shy this time,” she said.
Lagarde told journalists at the Washington news conference. “There are many issues that need to be addressed, those issues cannot wait for yet another summer holiday. You have the pressing immediate issues that have to do with sovereign debt … It’s broader than just the eurozone.”
Lagarde said she hoped politicians in Europe would make the “courageous decisions” needed to confront their debts and other economic problems.
She said that the US and Japan had debt concerns as well and that the sovereign debt crisis threatened an already fragile recovery.
Lagarde said that the financial crisis was over. “Obviously recovery has taken place as well and when we look at our growth forecasts for 2011, 2012 we are clearly on a rebound.” The recovery was “unbalanced” and fragile. “We are facing a turnaround that is very uneven with countries that were not historically leading the charge and advanced economies that are lagging behind in a way given the status of development,” she said.
Lagarde was appointed after the resignation of Dominique Strauss-Kahn, currently fighting charges of attempted rape. The appointment attracted criticism from economists and others who believed it was time for someone outside of Europe to head the IMF.
She said it was a top priority to push for greater diversity at the institution.
The reforms “should also reflect in our employment policies, in our training policies, in the way in which we build teams, in the way in which we organise recruitment so that people are not clones of each other”, she said.
The IMF is believed to be working on adding a new deputy managing director’s slot to its board, a position likely to be filled by Min Zhu, a Chinese national who now serves as a special adviser to the managing director.
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