PROFILE: Lagarde: Europe's choice as IMF chief with strong US ties

May 26, 2011, 10:01 GMT

Paris - French Finance Minister Christine Lagarde, who became an official contender for the post of International Monetary Fund (IMF) chief on Wednesday, is a flawless English speaker who ran a Chicago-based law firm before entering politics six years ago.

She is also a highly-respected figure, both at home and internationally, who has emerged as the consensus choice of Europeans to replace Dominique Strauss-Kahn in the job after Strauss-Kahn quit to fight sexual assault charges.

German Chancellor Angela Merkel had called Lagarde 'an outstanding and experienced personality' - praise echoed from Britain to Italy and Sweden, among other European Union members.

Although emerging markets have described the tradition according to which the job of IMF managing director goes to a European as 'obsolete' and called for change, French government spokesman Francois Baron said China was also 'favourable' to a Lagarde candidacy.

Lagarde, 55, was headhunted from her job at Baker & McKenzie law firm by former prime minister Dominique de Villepin in 2005.

After brief spells in international trade and agriculture, she was appointed by President Nicolas Sarkozy as finance minister in 2007, making her the first female finance minister of a Group of Eight (G8) country.

Her early days in the portfolio were difficult.

The willowy, white-haired lawyer was criticized for several gaffes, including suggesting that the French ditch their cars and take up cycling to avoid rising petrol prices.

The financial crisis of 2008 gave her an opportunity to turn things around. Lagarde took the full measure of the situation and pushed successfully for a coordinated European response.

In 2009, Forbes magazine placed her 17th in its listing of the world's most influential women while the Financial Times named her the EU's best finance minister.

This year she has been focused on the G20, which France is currently chairing.

In February, she got finance ministers from the world's leading developed and emerging markets to agree on a set of indicators of global imbalances that will be used to measure economic policy divergences.

For her negotiating skills and international profile, Lagarde's name had been circulating as a possible replacement for Strauss-Kahn before he was arrested last weekend on sexual assault charges.

The mother of two, who was part of France's national synchronized swimming team in her youth, has made no secret of her affection for the US, where she completed part of her schooling and later returned to practise law.

Working against Lagarde, who is a member of Sarkozy's conservative Union for a Popular Majority, is that she may be facing legal troubles of her own.

A French prosecutor recently threatened to investigate her for abuse of position in the 2008 settlement of a lawsuit between former politician and businessman Bernard Tapie and a French bank.

She is expected to know by mid-June whether the investigation will go ahead.

Read more about IMF Politics