Christine Lagarde faces court, calls for broad-based policy effort to reinvigorate at G20

The head of the International Monetary Fund (IMF), Christine Lagarde, must stand trial in France over a payment of €403 million (now £340m, then £290m) to tycoon Bernard Tapie.

Mr Tapie, a former French football team owner, won €403 million in 2008 in a case against the French public bank Crédit Lyonnais, after he said the bank undervalued his stake in Adidas. Christine Lagarde signed off on the payout as France’s minister of Finance at the time.

She is accused of negligence with the result that public funds were misused by improperly approving the decision to allow an out-of-court arbitration in the dispute with Mr Tapie. Ms Lagarde denies any wrongdoing.

However, Ms Lagarde has been the only candidate, backed by the UK, Germany, China, and her home country, France, to stay on for a second term as managing director for another five years.

IMF’s executive board had been briefed on the matter and continue to have confidence in Ms Lagarde’s capacity to carry out her functions.

Here’s what she said at the conclusion of the Group of 20 (G20) Finance Ministers and Central Bank Governors Meeting in Chengdu, China:

We met at a time of political uncertainty from the Brexit vote, and continued financial market volatility. Lackluster growth of the post-crisis era continues, with weak demand in advanced economies and difficult transitions to a self-sustained growth model in many emerging markets. As a result, global growth has been revised downward slightly for both 2016 and 2017.

Our discussions were taking place in a spirit of cooperation and willingness to tackle difficult issues. There was a consensus around the table that more needs to be done to share the benefits of growth and economic openness broadly within and among countries.

In this context, I noted that the G20 members are taking actions to foster confidence and support growth. I welcome their determination to use all policy tools —monetary, fiscal and structural— individually and collectively to achieve strong, sustainable, balanced and inclusive growth. Structural reforms are particularly critical, as recent IMF work shows that well-designed structural reforms can lift both short- and long-term growth and make it more inclusive. Further trade liberalization is also crucial to bolster productivity and global growth, while taking steps to ensure the gains from trade are shared widely.

The G20 members also emphasized the importance of further strengthening the International Financial Architecture and, in that context, a resilient Global Financial Safety Net (GFSN) with a strong and adequately resourced IMF at its center.”

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