It’s perhaps fitting that the Group of Eight leaders are holding their latest meeting at the French seaside town of Deauville, home of the legendary casino.

For, if we leave aside the Canadians and Russians, whose public finances are benefiting from the surge in commodity prices, the G8 is now essentially a club made up of the world’s biggest debtor countries.

For instance, Japan’s public debt is now close to 200% of GDP, but the country still notched up a budget deficit last year that was almost 10% of GDP. The United States is not far behind. Its debt is now more than  90% of GDP, while its budget deficit last year was 9% of GDP. It’s a similar story in Germany, France, the United Kingdom and France, where public debt exceeds 75% of GDP.

It wasn’t always this way, of course. The G8 used to be a sort of rich countries club, which represented the interests of the old, wealthy, northern economies. They were the creditor countries that lent money to the emerging — mostly southern — economies that needed to borrow in order to fund their huge investments in infrastructure, health, education and transport.

One of the key roles of the International Monetary Fund was to provide financial assistance to countries — traditionally emerging countries — that faced short-term funding crises.

But now the tables have turned. It’s the emerging southern economies — particularly China with its $US3 trillion in foreign reserves — that are providing the funding for the debt-laden G8 economies. And the IMF’s biggest challenge at present is bailing out the debt-laden “peripherals” in the eurozone. The IMF has committed to providing one-third of the money needed for bailing out countries such as Greece, Ireland and Portugal, with the European Union responsible for the other two-thirds.

And although German Chancellor Angela Merkel has threatened to use the G8 meeting to urge her fellow leaders to step up their efforts to cut debts, you can be sure that one of the key preoccupations for the European leaders at Deauville will be on making sure their candidate — French finance minister Christine Lagarde — snares the top job at the International Monetary Fund.

The post was thrown open last week when the IMF’s former boss resigned after being charged with the attempted r-pe of a housekeeper in an upmarket New York hotel. DSK — who is now holed up in a luxury $US14 million townhouse in lower Manhattan — is denying the charges through his lawyers. His defence team now say they have information that could “gravely undermine” the credibility of the housekeeper.

Lagarde, of course, is acutely aware of the importance of snaring the top job. She’s planning to set off on Sunday for a world tour, with stopovers in the major emerging countries such as China, Brazil and India, in an attempt to garner support for her candidacy.

She’s also making sure that she paints herself as an “inclusive” candidate who’ll look after the interests of emerging countries. In an interview with The Wall Street Journal, Lagarde stressed that she wanted the IMF to support the changes sweeping through North Africa and the Middle East, where long-standing autocratic leaders are being swept out of power by popular uprisings. She also wanted to emphasise the IMF’s role as the overseer of the global economy, and to give less-represented countries — such as Indonesia — a greater voice in the organisation’s decision-making process.

“I would certainly prefer to be endorsed by a very large majority, rather than being the European candidate pushed by the Europeans,” she said.

But not all the emerging countries are convinced that the tradition of handing the top IMF job to a European should continue. Speaking in Tokyo, Thailand’s finance minister Korn Chatikavanij said Lagarde was “perfectly capable” of running the IMF, but he expressed his concern that “the US and Europe will band together just because it’s in their mutual interest to do so”.

But, as they gather in Deauville, close by the casino, the G8 leaders know that the stakes they’re playing for have never been higher.

*This article first appeared on Business Spectator.