She was the most likely candidate: Christine Lagarde, the French minister of finance and economy, had been Europe’s favourite to succeed her fellow countryman, Dominique Strauss-Kahn, as head of the International Monetary Fund.
When the United States and Russia officially joined the group of her supporters on June 28, it was clear that the Parisian would snap the post from her last remaining competitor, Mexican central banker Augustín Carstens.
“I am honoured and delighted that the board has entrusted me with the position of managing director of the IMF,” Lagarde said in a Twitter post a few minutes after the decision was announced. She starts her five-year term on July 5.
The IMF top job has been vacant since Strauss-Kahn was arrested in New York on charges of rape and sexual assault in May.
No one doubts Lagarde’s qualifications. She studied labour law in the US and France and in 1981, joined the Chicago-based law firm Baker & McKenzie, becoming director in 1999. In 2005, French Prime Minister Dominique de Villepin offered her a cabinet job as minister for foreign trade. Two years later, she took over the super-ministry of finance and economy.
Lagarde, a tall and elegant figure, is praised as a skillful and pragmatic negotiator with excellent connections on both sides of the Atlantic. She also has a reputation for being straightforward and frank.
When the French complained about rising gas prices, she recommended that her compatriots cycle. And she wasn’t popular in Germany when she told German business to bring down its record exports and pay higher wages to give other European economies a better chance to compete.
But her direct approach also made Lagarde a well-respected politician in a continent struggling with huge financial problems.
She took a leading role in the creation of the European Financial Stability Facility, a rescue mechanism for countries on the brink of bankruptcy, and was seen as “Madame Oui”, in contrast to “Madame Non”, namely chancellor Angela Merkel, who for a long time denied there was a need to bail out countries such as Greece and Portugal.
The Financial Times voted her “Best finance minister of the year” in 2009, which is when the European debt crisis started.
When she takes up her new job in Washington, Lagarde will try to bring calm to an institution that has been rocked by the accusations against its former head.
But at home, in France, she is being investigated herself. Prosecutors have asked for an inquiry into Lagarde’s role in awarding compensation to the former minister of city affairs, Bernard Tapie.
Lagarde, accused of abuse of power, insists she didn’t do anything wrong. A decision on whether an inquiry will be opened is due in July. —