IMF chief Christine Lagarde to appear before French court

19 Apr 2013


IMF chief Christine Lagarde will appear before a French court over allegations of preferential treatment to a tycoon who was an ally of former president Nicolas Sarkozy.

Christine LagardeThe case goes back to 2007 when she was finance minister and the interior portfolio was held by Sarkozy.

Lagarde is due to appear before a special court looking into cases of ministerial misconduct on 23 May to answer accusations of favouring Bernard Tapie in a financial dispute that resulted in the businessman and politician being paid €400 million.

Tapie, a minister under Socialist president François Mitterrand in 1992-93, went on to support Sarkozy in the 2007 and 2012 presidential elections and prosecutors with the Court of Justice of the Republic (CJR) suspect that the settlement was a payoff for his support.

Describing Lagarde's handling of the case as "questionable" they suggest that she was partly responsible for "numerous anomalies and irregularities" that could lead to charges for complicity in fraud and misappropriation of public funds.

Lagarde's, lawyer, Yves Repiquet, described the summons as a ''non-event'', and said it had been expected for several months.

The accusations have been denied by Lagarde. She has also refused to resign from the IMF post, which she took following the resignation of another French former finance minister, Dominque Strauss-Kahn.

Meanwhile, Lagarde, has expressed renewed concern over the health of the UK economy saying the UK's growth numbers were not "not particularly good.''

However, speaking ahead of a high-level meeting of policymakers in Washington, she refused comment on whether UK needed to reassess its austerity policy.

In an interview ahead of the meeting between the IMF and the World Bank the governor-designate of the Bank of England, Mark Carney, said ''crisis economies'' were being left behind with the recovery in the US. These included the UK, the eurozone and Japan.

Carney has been reluctant to make any direct comment on the UK ahead of taking over at the central bank in July. However, he appeared to back chancellor George Osborne's view that austerity measures were important to promoting growth.

The IMF's chief economist, Olivier Blanchard, earlier this week urged the UK to rethink its austerity policy as the weakness in the economy continued.

However, Lagarde while speaking to reporters refused to go as far.

"We clearly support the (austerity) policy," she said. "[But] we've also said that, should growth be particularly low, then there should be consideration to adjusting by way of slowing the pace [of austerity].

"Looking at numbers... the growth numbers are certainly not particularly good."

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