(Updates with Lagarde’s e-mail to staff, analyst quote starting in seventh paragraph.)
Nov. 16 (Bloomberg) -- The head of the International Monetary Fund’s European department quit less than a year into the job and was replaced by a veteran staffer as the European debt crisis worsens.
Antonio Borges, a Portuguese native whose unit oversees bailouts in the euro region, resigned for “personal reasons,” the Washington-based IMF said today in an e-mailed statement. His successor is Reza Moghadam, who has made his career at the fund and headed the strategy department.
The management change comes as the IMF, which is co- financing bailouts in Greece, Portugal and Ireland, is preparing to send a team to Italy for an unprecedented audit of the country’s efforts to cut its debt. Borges, a former vice chairman at Goldman Sachs International, last month retracted comments he made about the fund’s possible involvement in the European bond market. He couldn’t immediately be reached for comment today.
“He has been a person who has been perhaps not particularly careful about his message discipline” at a time of “acute sensitivity for the IMF” said Jacob Funk Kirkegaard, research fellow at the Peterson Institute for International Economics in Washington. By contrast, Moghadam “is an in-house guy, he’s been there for a very long time and he’s clearly someone who knows the ins and outs of the IMF.”