France's Finance Minister Christine Lagarde has been named chief of the International Monetary Fund, making her the first woman to hold the position since the organisation was created in 1944.
Lagarde, 55, ran against Mexico's Central Bank Governor Agustin Carstens for the job. While the IMF issued a statement expressing that both candidates were qualified, Lagarde received an edge on the competition with backing from Europe, China, India and Brazil.
Although Lagarde is the first woman to take the position, she fits the its traditional European mould. Historical trends show that Europeans have generally led the IMF while Americans have dominated the top positions at the World Bank.
Carstens campaigned on a platform of diversity. He felt that the next IMF chief should represent the developing nations making a breakthrough in the economic world.
However, Lagarde campaigned around the world, receiving support from the Middle East, Asia and South America. The race took a dramatic turn in her favour when America and Russia voiced support for her on Tuesday.
Carstens said he sent Lagarde his "best wishes and full support" and hoped she would "make meaningful progress in strengthening the governance of the institution".
An IMF statement reported that the 24 members of its board believed either candidate would excel if given the position, but they decided on Lagarde "by consensus".
Many world leaders were pleased with the choice.
UK Chancellor of the Exchequer George Osborne said he was "delighted" and French President Nicolas Sarkozy called it "a victory for France".
US Treasury Secretary Timothy Geithner voiced his support, saying: "Minister Lagarde's exceptional talent and broad experience will provide invaluable leadership for this indispensable institution at a critical time for the global economy."
Lagarde assured the public that she would uphold a global perspective and that her European roots would not affect that focus.
"I will make it my overriding goal that our institution continues to serve its entire membership," Lagarde said in a statement. "As I have had the opportunity to say to the IMF board during the selection process, the IMF must be relevant, responsive, effective and legitimate, to achieve stronger and sustainable growth, macroeconomic stability and a better future for all."
When Lagarde begins her five-year term on 5 July, she will immediately begin work to help resolve the Greek financial crisis and prevent it from spreading to the other members of the eurozone.
In an interview that took place immediately following her appointment, Lagarde appealed to Greece to push for the austerity measures that the IMF and EU have set as conditions for a second bail-out package for the country.
"If I have one message tonight about Greece, it is to call on the Greek political opposition to support the party that is currently in power in a spirit of national unity," Lagarde told the nation erupting with protests.
The position of IMF chief became vacant after Dominique Strauss-Kahn resigned on 18 May after being arrested in New York on charges of sexual assault which he denies.
Despite the scandal surrounding Strauss-Kahn, Lagarde has said she wants to talk with him about the position she is about to undertake.
"I want to have a long talk with him, because a successor should talk with their predecessor," Lagarde said in a French television channel TF1 interview. "I can learn things from what he has to say about the IMF and its teams."
Lagarde hopes that she can unify the IMF's staff of 2,500 employees and 800 economists as she steps in during this time of disorder. She wants to restore confidence in the organisation.