Lagarde resigns as IMF MD, set to head European Central Bank

With her eyes set on becoming the next head of the European Central Bank, Christine Lagarde Tuesday submitted her resignation as Managing Director of the Washington-based International Monetary Fund (IMF).

Lagarde was recently nominated to head the European Central Bank chief. She was nominated to succeed Mario Draghi. Lagade's resignation will become effective on September 12.

“With greater clarity now on the process for my nomination as ECB President and the time it will take, I have made this decision in the best interest of the Fund, as it will expedite the selection process for my successor,” Ms Lagarde said in a statement.

The IMF executive board said it will “initiate promptly the process of selecting the next Managing Director and will communicate in a timely fashion.”

David Lipton will remain acting managing director.

“We would like to express our greatest appreciation for all that Managing Director Lagarde has done for the institution,” the board said.

“Her legacy of achievements has made a lasting imprint on the Fund. Under her guidance, the Fund successfully helped its members navigate a complex and unprecedented set of challenges, including the impact of the global financial crisis and its aftershocks.”

Ms Lagarde’s formal resignation ends an eight-year run as the IMF’s chief and comes a day before a meeting of G7 finance ministers is set to begin in Chantilly, France, in what some view as a trial run for potential candidates.

Delivering the opening address of the 2017 High-Level Caribbean Forum at the Jamaica Pegasus Hotel in Kingston in November 2017, Ms Lagarde trumpeted St Kitts and Nevis, Grenada and Jamaica as exemplary countries for the region having successfully implemented reforms to bring down their debt levels.

That was not the first time that the IMF had publicly congratulated St Kitts and Nevis as a result of the reduction in the debt to GDP ratio due to the success of the home-grown programme which ran from 2011 to 2014 when Dr Douglas served as Prime Minister and Minister of Finance.

In October 2013, a WINNFM report quoted Deputy Director of the IMF’s Western Hemisphere, Ms. Adrienne Cheasty as saying that there was a surplus in St Kitts and Nevis that year and the debt was coming down.

WINNFM also quoted then Chief of Mission for St Kitts and Nevis, Ms Judith Gold as saying that St Kitts and Nevis had recorded a strong economic growth in the first half of 2013, the most solid in the Eastern Caribbean.

In 2014, St Kitts and Nevis became the first country in the world to return a US$40 million loan to the International Monetary Fund (IMF).

The IMF also said that debt reduction was “on a sustainable path, projected to reach a low of 60 percent of GDP in a few years.”

Then Prime Minister Douglas was widely praised for his leadership in the development and implementation of the home-grown structural programme and returning the economy to positive growth in spite of the global economy which continued to negatively impact many countries in the Caribbean region.

In his first meeting in 2015 with a visiting IMF Team in his capacity as Leader of the Opposition, Dr Douglas was personally congratulated for the substantial improvement in macroeconomic conditions, a return to robust growth, and an overall successful program performance in St Kitts and Nevis.

The IMF directors noted that the debt restructuring, leading to a steep reduction in overall public debt, had placed debt ratios on a downward path and with the Labour Party’s economic policies, fuelled rapid GDP growth of nearly seven percent in 2013 and 2014.

In her presentation the IMF official noted that too often, promising reforms have been cut short from policies driven by political pressure and that stronger institutions and fiscal frameworks can help safeguard prudent fiscal policies, especially as climate change is expected to intensify the impact of natural disasters and worsen the vulnerability of small states in the Caribbean.