Yesterday the 24 member board of the International Monetary Fund appointed the French finance minister, Christine Lagarde, as IMF Managing Director and Madame Chairman of the Executive Board for a five-year term starting on July 5, 2011.

Ms Lagarde won the post by consensus over her rival for the position, Agustín Carstens who has served as the Governor of the Bank of Mexico since 1st January 2010 and was formerly both a deputy managing director of the IMF as well as the Mexican finance minister.

Although the 55 year old Lagarde is the first female head of the IMF since its formation in 1944, the organisation has always had a European in the post. This was something that Carstens called to be changed during his campaign.

Taking over the post from the troubled Dominique Strauss-Kahn who earlier resigned after being charged in New York with sexual assault, Ms Lagarde will be supported by three deputy managing directors and 2,700 staff from 140 countries.

Her candidacy may well have been strengthened substantially after the US officially endorsed her with Tim Geithner the US treasury secretary saying she is an ‘exceptional talent’.

The UK had earlier backed her for the job and the chancellor, George Osborne, said she was ‘good news for the global economy and for Britain’. He also called her ‘smart’ and ‘clever’.

Although the French president, Nicolas Sarkozy, will have a hard time replacing her he said that this appointment was a ‘victory for France’.

Lagarde stepped straight up to the plate and has unsurprisingly supported the IMF backed plans for tough austerity over the Greek debt issue.

Agustín Carstens has extended his best wishes and ‘full support’ to Christine Lagarde. ‘I am sure that Ms. Lagarde will be a very capable leader of the institution’ he said.

Since Strauss Khan’s resignation the first deputy managing director, John Lipsky, had been caretaking the post. Lipsky is due to retire and this post will be up for grabs when his appointment expires on 31st August, a post that has always ended up being filled by a US national.

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