Who is Christine Lagarde?
Christine Lagarde is a French lawyer and politician nominated for President of the European Central Bank (ECB). She is currently Managing Director of the International Monetary Fund (IMF) but has temporarily relinquished her responsibilities during the nomination period. She has held the post since July 5, 2011 and is currently in her second five-year term.
Born January 1, 1956 in Paris, France to two language teachers, Lagarde has several accomplishments to her name and is seen as a trailblazer for women in global finance and policymaking. She was the first woman to hold the post of finance minister of a G-7 country and is the first female head in the history of the IMF. Forbes named her the third most powerful woman and the 22nd most powerful person in the world in 2018.
Lagarde is not an economist and is seen as an unconventional pick for the most powerful role at the ECB, especially since she has no experience as a central banker. She holds a law degree from the University of Paris X Nanterre and a master's degree from the Political Science Institute in Aix en Provence. She was a member of the French national synchronized swimming team as a teenager and speaks fluent French, English and Spanish.
Lagarde began her career as an associate at the Paris office of Chicago-based law firm Baker McKenzie where she specialized in labor, anti-trust, and mergers and acquisitions. She made partner by age 31, and by age 43 she had been chosen as the international firm's first female chair.
In 2005, she joined French politics and would remain a government minister for seven years. During this period, she held the posts of trade minister, agriculture and fisheries minister, and finance minister. Lagarde was finance minister of France during the global financial crisis and impressed world leaders with her judgement and leadership. She played a key role in the organization of the emergency EU bailout fund for banks.
Lagarde replaced Dominique Strauss-Kahn as IMF head after he was accused of sexual assault. She was confronted with the aftermath of the global financial crisis, the eurozone debt crisis and international trade disputes among other things. She also approved a $56 billion bailout to Argentina – the biggest in IMF history – in 2018. Under her leadership, the IMF has argued the rich should be paying higher taxes to reduce inequality, advocated for reforming the global tax system and warned about the macroeconomic effects of a few companies having outsized market power. Lagarde has warned about the danger to the global economy posed by high levels of debt in various countries. She has also suggested central banks should consider issuing digital currencies in the future for the benefits it offers, like financial inclusion. The IMF became more vocal about climate change under Lagarde. She told Bloomberg in February 2019 her greatest fear is its impact on her grandchildren.
In the role of ECB president, her strengths are believed to be her political acumen, contacts and ability to build consensus. However, the absence of an economics background or a discernible opinion on monetary policy means she would have to rely on financial technocrats a fair amount.
Lagarde, who says she faced sexism and discrimination in her professional life, has been an advocate for gender inclusion and quotas for women in business. She famously said, "If it had been Lehman Sisters rather than Lehman Brothers, the world might well look a lot different today.” Interestingly, she has always insisted on holding the title "chairman" instead of "chairperson" or "chairwoman." She says, "Insisting on marking femininity by the gender of words is ridiculous."
The Tapie Affair is the biggest scandal linked to Lagarde. In 2016, a French tribunal found her guilty of negligence after she approved a payment of over 400 million euros in public funds to French tycoon Bernard Tapie, a close friend of the then prime minister, Nicolas Sarkozy. Tapie had accused the formerly government-run Crédit Lyonnais bank of undervaluing his majority stake in Adidas when it bought it from him in 1993. The multi-million euro award granted to him by a government arbitration panel was not appealed by Lagarde. The payout was eventually annulled, and Lagarde faced up to a year in jail and a €15,000 fine for her poor handling of the situation, but the court decided against any punishment. Tapie was acquitted of fraud charges related to this by a Paris court on July 9, 2019.