French finance minister gets Austrian support for IMF top job



French Finance Minister Christine Lagarde - Getting Austrian Support for IMF Top Job

French Finance Minister Christine Lagarde – Getting Austrian Support for IMF Top Job

Maria Fekter, the Austrian finance minister has come out in the support of her French counterpart Christian Lagarde for IMF chief’s job and also backed Austrian banks in the debate over new capital rules.

“There is great interest in this tradition that a European leads the IMF and the Europeans are fighting for this now, said Fekter on Austrian Radio on Saturday.

Backing the French finance minister for IMF top job, she added: “(Lagarde is) a very competent person. I know her and I could well imagine that Austria would join in here”.

The IMF chief Dominique Strauss-Kahn has resigned after being convicted of rape-charges in New York and there is intense competition from different parts of the world for the top job.

On being asked if politicians are doing enough to protect the country’s economic interests, she said she’ll lobby with the EU to ensure that Austrian banks don’t become uncompetitive due to new capital requirements under Basel III.

Chief executive of Erste Group Bank Andreas Treichl had kicked up a storm when he called politicians “too stupid and cowardly” to fight the newly proposed Basel III norms for lending. He argued that banks will have to make 10 times more provisions for capital under the new rules even to make advances to perfectly healthy companies, bringing them at par with struggling countries like Greece.

“I think it is a legitimate approach to differentiate between (rules covering) investment banks and commercial banks and we will make efforts in Brussels to get exactly this differentiating treatment into the rules”, Fekter said when asked to comment on Treichl’s observations.

Erste Bank had been asked to pay back €1.2 billion of state funding it had received at the height of the financial crisis by the end of next month, Treichl said.

However, Fekter disapproved the claim saying: “To make a repayment the bank needs to show national bank supervisors and the National Bank that its capital coverage is sufficient.

“We don’t have yet an official repayment application because first the procedure has to be settled with the National Bank before they can apply”.

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