Christine Lagarde Resigns From IMF for ECB

• Christine Lagarde Resigns From IMF for ECB

The Managing Director of the International Monetary Fund, Christine Lagarde, has resigned her position effectively on Tuesday to become the next president of the European Central Bank (ECB).

Lagarde, who was nominated to succeed Mario Draghi at ECB, said: “I am honored to have been nominated for the Presidency of the European Central Bank.”

“In light of this, and in consultation with the Ethics Committee of the IMF Executive Board, I have decided to temporarily relinquish my responsibilities as Managing Director of the IMF during the nomination period,” Lagarde said in a statement released on Tuesday.

If Lagarde emerged the President of the European Central Bank, she would have to devise a solution for Europe’s economic slowdown.

President Draghi had said the apex bank would announce additional stimulus if the region’s economy continues to deteriorate. However, IHS Markit on Monday said the manufacturing sector of the Euro-area contracted for a fifth consecutive month in June.

The manufacturing Purchasing Managers Index contracted to 47.6 in June. Germany, the region largest economy, contracted the most at 45. Still, its 4-month high.

New job creation and export orders in the Euro-Area plunged during the month, while weak output and low new orders weighed on employment.

Again, while it is likely Christine Lagarde emerged as the ECB president given the level of support she has been receiving since she announced her resignation from IMF in pursuit of ECB, the European Parliament, as well as the Euro-Area finance ministers, will still have to vote.

“I know Christine Lagarde as the boss of the IMF, I know her as a tough lady, as somebody who knows what she wants, who is very clear on giving directions, when you come to her to get a loan, (she is) very tough on conditions, so I wouldn’t like to be the European country who needs to go to the ECB asking for favors,” Mark Rutte, Dutch Prime Minister told CNBC in Brussels.