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Portugal junk bond status mars Lagarde's IMF start

Reuters/Kevin Lamarque

Former French finance minister Christine Lagarde faced trouble as soon as she took over the leadership of the International Monetary Fund Tuesday, with credit ratings agency, Moody’s, downgrading Portugal’s debt to junk status.

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The announcement means there is a growing risk the country will need a second bailout. It follows hard on the heels of the Greek crisis, which should prove another headache for

Dossier: Eurozone in crisis

Lagarde, and further threatening the economy of the whole European Union.

Lagarde is the first woman to head the IMF. She takes over from Dominique Strauss-Kahn, who resigned after accusations of sexual assault by a New York chambermaid.

A former lawyer, Lagarde, 55, joined the French government in 2005 as trade minister, becoming finance minister in 2007.

She beat Mexico’s Agustin Carstens to the job, maintaining Europe’s 65-year lock on the position. There has been criticism by some developing nations saying that the fund is

Dossier: The Strauss-Kahn affair rocks France, IMF

overly aligned with the European and the US way of thinking and not sensitive to the situation of emerging and poor economies.

Lagarde’s career may face trouble thanks to a possible legal case in France. A Paris court will decide Friday whether to open an inquiry into alleged abuse of authority in settling a dispute with businessman and former politician Bernard Tapie.

On France 24: IMF: Lagarde steps into Strauss-Kahn's shoes - and shadow

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