May 20th, 2011
05:21 PM GMT
As Christine Lagarde prepares to take the reins at the International Monetary Fund, her cool head in a crisis and capability in negotiating consensus will stand her in good stead.
I first met Madame Lagarde in 2007, shortly after she was appointed France’s Finance Minister – the first woman to hold such a role among the world’s eight most industrialized nations.
I remember being transfixed by two things: her imposing stature (standing six-feet tall versus my five-foot nothing) and considerable self assurance. Yet Lagarde’s “Iron Lady” ego and Thatcheresque looks belie a more deadly weapon to those who stand in her way. For Ms Lagarde is, above all, charming.
At a meeting of EU finance chiefs in the South of France a year later, I watched Lagarde’s male counterparts both cower and drool as she delivered a powerful pre-dinner speech in the garden of a Riviera villa. She was wearing a suit that meant business and satin stilettos that said cocktail time.
The evening was warm, the champagne flowed and with Lagarde on the stage, the credit crunch seemed a distant memory even though Europe was already lurching into a recession.
Lagarde, whose country was now halfway through its rotating EU presidency, was on top form even if the financial sector was not. You see, part of Lagarde’s charm is that she embodies contradictions.
But that gathering was France entertaining its clubby eurozone neighbors and now Lagarde will soon be playing to a larger audience with more power, more money. Those who have met her more than once over the years, like me, have no doubt she will rise to the challenge.
In fact, while some eurozone colleagues may shrink behind the weight of their hefty responsibilities (see Greece) Lagarde shines when given a tough job to do.
Soon after becoming France's Finance Minister, with the onset of the credit crunch well and truly apparent, I remember Lagarde summoned the heads of all of the country's banks and made them be brutally honest with her about their finances.
Looking back on those days in a recent interview for the documentary 'Too Big to Fail,' the French Finance Minister admitted with candour that the first time she found out about the collapse of Lehman Brothers was 'after the event.'
She certainly won't be able to say the same about Greece – if or when (according to an increasing number of analysts) – it defaults.
At first glance Lagarde seems as Gallic as they come. She always makes time during her busy schedule to have a proper lunch – le dejeuner is in fact something of a ritual on the sixth floor of number 139 Rue de Bercy, the seat of the finance ministry in Paris.
So far so French… yet what makes Lagarde properly palatable to politicians across the Pond is that she has spent many years in the United States, reaching the top of Baker & McKenzie, one of the country’s biggest law firms, as its first female chairman. Lagarde’s time in the U.S. has left her with impeccable English and fluent in the language of finance, making her one of the most lucid and respected politicians in Europe.
Her pulling power extends to the media as well. Last year Forbes magazine rated her the world’s 43rd most powerful woman and she was voted best European finance minister by the Financial Times in 2009.
But for Lagarde, being European –or indeed French – may prove to be a double-edged sword. France has dominated the top positions at the fund since its inception in 1945, providing four out of its past 11 managing directors. And while emerging markets have stoked debate about opening up the field, experts say it’s unlikely European countries will relinquish control anytime soon with bailouts for Greece, Portugal and Ireland to consider. So, with a new European MD at the fund Ms Lagarde will have to choose her moves wisely-lest she attract accusations of 'Old World' favoritism.
For the 24-member executive committee making the appointment this week, things couldn't have turned out better, as Agustin Carstens, the Mexican Central Bank Governor, would make an ideal fit to replace John Lipsky as Deputy MD.
Such an appointment would also appease growing calls for more developing world representation among the top tiers at the IMF.
Christine Lagarde is a woman with many facets but her laser-sharp focus is what marks her out most. The mother of two once represented her country’s hopes in synchronised swimming. Her hair may be silver but make no mistake she's going for gold. Whether the IMF and the eurozone will have any left when they've finished bailing out Greece is another matter.
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