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IMF

France urged to drop probe against IMF chief

The French public prosecutor's office on Tuesday requested the dismissal of a negligence case against IMF chief Christine Lagarde linked to her role in an arbitration case while she was finance minister.

Published: 23 September 2015 10:57 CEST
France urged to drop probe against IMF chief
French public prosecutor has told investigators to drop the probe into IMF chief Christine Lagarde. Photo: AFP

If the investigating magistrates at the Law Court of the Republic (CJR) accept the recommendation, the investigation will be dropped, a source close to the case told AFP.

There was no immediate confirmation from the CJR, a special court established to try cases of ministerial misconduct.

And there was no immediate response from Lagarde's lawyer.

On August 27, the CJR formally opened an investigation into Lagarde on grounds of alleged “negligence”.

The case dates back to 2008 when she decided to allow arbitration to end a dispute between controversial French tycoon Bernard Tapie and the Credit Lyonnais bank.

At the time, she was finance minister under the government of then president Nicolas Sarkozy.

The arbitration resulted in Tapie, who had close ties to Sarkozy, being awarded a 403-million-euro payout to settle his dispute with the bank.

Lagarde's handling of the case — specifically her failure to challenge the award that was hugely beneficial to Tapie but prejudicial to the state — has seen her placed under formal investigation for “negligence”.

She has denied any wrongdoing.

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ECONOMY

Italy’s economic policies will hit the poor hardest: IMF

Economic policies implemented by the populist government in Rome leave Italy's economy vulnerable to recession, with the poorest likely to suffer the most, the IMF warned.

Published: 7 February 2019 09:45 CET
Italy's economic policies will hit the poor hardest: IMF
Italy's economic policies could lead to recession, the IMF said. Photo: Andreas Solaro/AFP

“The authorities' policies could leave Italy vulnerable to a renewed loss of market confidence,” an International Monetary Fund annual report on the country said yesterday.

“Italy could then be forced into a notable fiscal contraction, pushing a weakening economy into a recession. The burden would fall disproportionately on the vulnerable,” the IMF added.

The Italian economy, the eurozone's third largest, fell into a technical recession at the end of 2018.

The fund expects the Italian economy to grow by no more than 0.6 percent this year, well below the government's own estimate of 1.0 percent.

The European Commission is tipped to lower its Italian growth forecast on Thursday, and slower growth could spell trouble for Italy, where around 20 percent of national output is swallowed up each year by payments on the public debt, the second biggest in the eurozone.

Photo: Depositphotos

The IMF report praised the coalition government's “objective to improve economic and social outcomes (as) welcome.”

But it added that the only sustainable way of achieving such goals was through “faster potential growth” that would require structural reforms, “a credible fiscal consolidation” and stronger bank balance sheets.

The coalition government of the anti-establishment Five Star Movement (M5S) and the far-right League party was forced to water down its ambitious and costly budget in December to avoid being punished by the EU Commission and financial markets.

The IMF report emphasised Wednesday that Italy “needs to tackle long-standing structural impediments to productivity growth. 

“This includes decentralising the wage bargaining regime, liberalising service markets, and improving the business climate.”

Deputy Prime Minister and M5S leader Luigi Di Maio quickly rejected the IMF report, charging that the Fund “has starved people for decades.”

The IMF, Di Maio claimed, “has no credibility to criticise a measure like the citizenship income programme,” the party's plan to introduce a welfare payment of 780 euros a month for Itay's least well-off.

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