The selection of French Finance Minister Christine Lagarde to succeed disgraced compatriot Dominique Strauss-Kahn as head of the International Monetary Fund (IMF) hardly took anyone by surprise. Even before Tuesday’s IMF board meeting naming her managing director, Lagarde’s appointment had become a foregone conclusion for most observers. Because despite the opposition of some emerging nations to Lagarde as confirming Europe’s enduring lock on the IMF top job, few people contest the 55-year-old Frenchwoman is ideally placed to stabilize an organization still internally shaken by the fall of its former managing director to attempted rape charges—and to negotiate the often painful remedies to economic crises ravaging nations around the globe.
“The good news is the IMF is getting a capable and respected managing director with cool head, engaging personality, and a proven record during times of considerable economic crisis in both France and Europe,” says Marc Touati, director and chief economist of the Paris-based financial service company Assya. “She’s an intelligent woman, a hard worker who gets results, and is exceptional in French government in having a real Anglo-Saxon culture that has served her and the country well on the international level. The IMF’s gain is France’s loss.”
Though that loss is one many people in France will gladly suffer to compensate for the scandal and drama of Strauss-Kahn’s New York arrest (and subsequent resignation) in May, Lagarde’s move to Washington D.C. for the IMF job will leave a large, difficult hole to fill at home. A trained lawyer who previously presided international law firm Baker & McKenzie from Chicago, Lagarde has filled successive trade, finance, and economic positions in French cabinets since being called into government under former President Jacques Chirac in 2005. Her work in those roles not only earned her plaudits for managing complex economic decisions and relations with France’s trading partners, but also allowed Lagarde to put two important assets to very good use: her perfect English, and American-influenced attitudes, sensibilities, and humor that became second nature to her while working in the U.S. Over time, those made Lagarde a novel but efficient breath of fresh air in French and European policy meetings.
“Christine Lagarde is neither an economist nor a professional politician, yet she has excelled in economic and political posts thanks to her intelligence, adaptability, personality, and application of the very American notion that nurturing positive relationships even in formal situations can work out very well for everyone,” says a French political consultant who—like Lagarde–has worked frequently with European and American officials. “She’s opposite of the obnoxious, arrogant politicians France usually unleashes on the rest of the world, and who go into international meetings seeking to beat partners into so-called consensus. Lagarde wins people over to her position as much as possible, and looks for common ground elsewhere where she can make things happen.”
Lagarde’s constructive, can-do attitude made her central to negotiations that produced a series of European economic agreements over the past decade—notably recent efforts to hammer out collective responses to the debt crisis threatening the euro. In doing so, however, the political consultant notes Lagarde’s role in both France and Europe has largely been limited to defending positions defined by her boss, President Nicolas Sarkozy. Yet economist Touati says familiarity in having limited margin for maneuver in seeking agreement on potentially divisive proposals will be of use to Lagarde at the IMF.
“The leader of the IMF has personal impact on the way things are done, the tone of discussion, and on management style, but not so much on what the IMF does—which pretty much remains applying the same kinds of responses to economies in turmoil as it always has,” says Touati says. “As captain of this enormous vessel, Christine Lagarde won’t be making any more abrupt changes of course in policy than Dominique Strauss-Kahn did. But you’d rather have someone at the helm with a proven record and a good reputation internationally than someone people will second guess or oppose all the time.”
Meanwhile, some observers note that even if Lagarde’s job as Finance Minister required her to advance policies handed down from on high by Sarkozy, she could still make it clear when she wasn’t entirely convinced an initiative was the right move. Recently, for example, Lagarde palpably balked at Sarkozy’s decision to force certain private companies posting profits to pay bonuses to their employees.
“Her job is to execute orders, but her intelligence and integrity are such that she’s not going to pretend she’s happy about policy decision that quite clearly aren’t good,” confides a Lagarde advisor. “Plus, as an outsider to politics, she’s managed to maintain her perspective and see just how ridiculous politics and politicians can be. She still sees it when emperors aren’t wearing any clothes. And, unlike most other cabinet members or European officials she’s dealt with over the years, Christine Lagarde isn’t interested in a life-long career in government at any cost. She’s always said she’ll eventually go on to other things.”
Ironically, says the political consultant, it’s that atypical outlook within France’s ruling class that has made Lagarde so popular at home and abroad. A recent poll ranked Lagarde’s approval rating fifth among all politicians (a 52% mark that led all cabinet members, and dwarfed Sarkozy’s own 30% score). Her reputation is similarly positive among peers across Europe, and with American figures ranging from U.S. Treasury Secretary Timothy Geithner (who formally backed Lagarde’s IMF bid Tuesday) to comedian Jon Stewart.
“With foreign officials used to dealing with ranting bullies like Sarkozy, or cabinet members thinking entirely in terms of how their next move will affect their own political career, it’s not surprising a guy like Geithner sees Christine Lagarde and identifies her as someone he can finally get things done with,” the political consultant says. “Frankly, when she was first named to government as a total outsider, I didn’t think she’d last long. And reaction to her initially convinced me I was right. It turns out I was wrong. Her unusual perspective and character have been her main assets.”
Sadly, says economist Touati, the inverse will probably be true when Sarkozy moves to replace Lagarde as Finance Minister this week after her IMF appointment has been finalized. “Though her successor probably won’t have any more economic background Christine Lagarde did when she was named, they also won’t have any of the personality traits, American experience, or distance from France’s obsessions that allowed her to achieve so much in her governmental post,” Touati says. “As I said, the IMF’s gain is France’s loss.”