The IMF’s Christine Lagarde: Can She Fix Europe?

The head of the IMF was key to dealing with the Cyprus crisis. There’s more trouble for her to deal with

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There was a time not that long ago when the International Monetary Fund was an obscure body whose financial work was a mystery to most regular people. Then its Managing Director Dominique Strauss-Kahn put the organization on the map for all the wrong reasons: He was hauled into prison in New York in May 2011, and charged with sexually assaulting a Manhattan hotel maid. The explosive scandal (the charges were finally dropped) ended his career. And in his place is one of the world’s most intriguing women leaders: Christine Lagarde.

This week TIME asks “Can this woman fix Europe?” After following Lagarde around Paris and Frankfurt as she dealt with Cyprus–one of Europe’s worst debacles in years–I have come up with one possible response: If Christine Lagarde can’t fix Europe, who can?

(MORE: Lagarde on Emerging Market Nations Getting More Power in the IMF)

While the tiny Mediterranean island threatened to send the world economy into a tailspin, Lagarde managed to maintain her cool and even crack a few jokes. Zipping from Paris, Brussels, Frankfurt, Washington and back to Brussels in the course of 10 days, Lagarde coaxed, prodded, harangued, schmoozed and lunched officials into a deal that would somehow save the euro. Invariably, she was about the only woman in the room: A tall, silver-haired figure bounding between meetings amid a sea of gray-suited bureaucrats. “All men, all men,” she says, describing her meetings in Algeria, from where she had just landed when I met with her in Paris.

The euro might be safe—at least for now. But safeguarding the reputation of Lagarde, ex-Finance Minister of France, and her EU partners who hammered out Cyprus’ bruising bailout is another question. Enraged Cypriots emptied ATMs and stormed into the streets, saying the bailout would devastate their country for at least a generation. One newspaper cartoonist in Lagarde’s own country showed Cyprus as a medieval prisoner in stocks. Some IMF critics privately wonder whether Lagarde, who, unlike Strauss-Kahn, is not an economist, can tackle a crisis this complex. To that, Lagarde says it’s time for economists to stop talking in opaque academic terms, and start engaging with people on their own terms. “Sometimes there are meetings when I stop [someone from] talking and say, ‘Stop it. You’ve lost me,’” she tells me. “You have to use simple terms that people out on the street will understand, because otherwise you are just talking to yourselves.”

MORE: IMF Chief: Economic Meltdown in Cyprus Could Have ‘Contagion Risks’