French Finance Minister Top Contender For IMF Chief

French Finance Minister Christine Lagarde speaks with International Monetary Fund managing director Dominique Strauss-Kahn at a meeting of international finance leaders on April 15. In the wake of Strauss-Kahn's resignation from the IMF, many experts believe Lagarde is well-positioned to take the job. i i

hide captionFrench Finance Minister Christine Lagarde speaks with International Monetary Fund managing director Dominique Strauss-Kahn at a meeting of international finance leaders on April 15. In the wake of Strauss-Kahn's resignation from the IMF, many experts believe Lagarde is well-positioned to take the job.

Nicholas Kamm/AFP/Getty Images
French Finance Minister Christine Lagarde speaks with International Monetary Fund managing director Dominique Strauss-Kahn at a meeting of international finance leaders on April 15. In the wake of Strauss-Kahn's resignation from the IMF, many experts believe Lagarde is well-positioned to take the job.

French Finance Minister Christine Lagarde speaks with International Monetary Fund managing director Dominique Strauss-Kahn at a meeting of international finance leaders on April 15. In the wake of Strauss-Kahn's resignation from the IMF, many experts believe Lagarde is well-positioned to take the job.

Nicholas Kamm/AFP/Getty Images

The International Monetary Fund is looking for a new leader after former head Dominique Strauss-Kahn resigned last week to fight charges of sexual assault in New York City. One of the top names under consideration is also French: Christine Lagarde, the French finance minister. She officially announced her candidacy Wednesday.

Appointed by President Nicolas Sarkozy in 2007, Lagarde is the first woman ever to head the economic affairs of a G-8 economy. Though she got off to a shaky start in her relations with the French media, she came into her own during the world economic crisis.

"She spoke perfect English; she knew how things worked overseas," says Gregory Viscusi, a reporter with Bloomberg News who follows Lagarde in the European financial world. "She's always quite pleasant to deal with. In French politics, she's one of the few people that doesn't always seek a political fight."

Christine Lagarde's Background

Born in Paris in 1956, Christine Lagarde began her legal career with the large Chicago-based law firm Baker & McKenzie, where she specialized in employment and antitrust cases, in 1981. She was named chairwoman of the firm in 1999.

Lagarde became France's trade minister under former President Jacques Chirac. In 2007, President Nicolas Sarkozy named Lagarde the finance minister.

Why she's a top candidate for IMF chief:

  • The first woman ever to head the economic affairs of a G-8 economy, she is widely respected in economic and political circles.
  • She is comfortable dealing with Americans — "extremely important for such a job," says Francoise Nicolas, a financial expert with the French Institute of International Relations.
  • Europeans say it's important to keep a European in the job.

Potential problems:

  • The leaders of Brazil, Mexico and China say it's time to have someone from a developing nation or emerging market lead the IMF.
  • Lagarde's handling of a dispute involving a tycoon and a French bank in 2008 has been questioned.

— NPR, Biography In Context, BBC

Rumor has it that when the crisis broke, then-U.S. Treasury Secretary Henry Paulson would take calls from Lagarde but not other foreign officials. Her ease with American culture comes from her time spent studying and working in the U.S. She spent a year at a Bethesda, Md., high school and later served as a labor lawyer and partner in a Chicago law firm. Lagarde returned to France in 2004 to become trade minister under former President Jacques Chirac.

President George W. Bush called her one of the family, and Forbes ranked Lagarde the 17th most powerful woman in the world in 2009 as she battled the global economic crisis.

During that same year, she made an appearance on The Daily Show with Jon Stewart.

"Most of our banks were fine. But it happened that there was one that didn't do right, was losing money, and we had to just inject capital — put equity in the bank," she said. "And once you become the shareholder — I, certainly, for one said the management is out. They did a crappy job; they have to go."

No matter his current situation, Strauss-Kahn is said to have done an excellent job as IMF chief. He is credited with increasing the strength and relevance of the institution as it steered nations away from bankruptcy and helped buttress the euro currency.

Francoise Nicolas, a financial expert with the French Institute of International Relations, says Lagarde can fill Strauss-Kahn's shoes.

"Christine Lagarde has precisely a number of the qualities that are needed to replace him. She has an international profile. She knows how to deal with Americans, which is extremely important for such a job," Nicolas says.

These days, Lagarde is hounded by the media whenever she appears in public. One possible stumbling block to her candidacy is her questionable handling of a high-profile dispute involving a tycoon and a French bank in 2008. A French court will decide soon whether there should be a formal investigation.

For now, Lagarde has the support of Britain, Germany, Italy and the Netherlands. Europeans say it is important to keep the IMF post because of the ongoing sovereign debt crisis.

Though the IMF has traditionally been led by a European, and the World Bank by an American, there is pressure to change that. The leaders of Brazil, Mexico and China say it is time to have a representative from an emerging market or developing nation.

Reporter Viscusi says the fact that Lagarde is a woman is good for the obvious reason — to make a clear break with the sex scandal. But he says there are other advantages, especially if Europe and America want to keep the status quo for now.

"Having a woman, it certainly goes partway," he says. "It's not someone from the developing world, but it's not someone from the old-boy's club, either. So I think it might be a way, sort of, to make people swallow the pill of having yet another European."

The IMF is accepting candidates until June 10, and the institution says it will choose its next director by the end of June.

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Correction May 27, 2011

The audio and a previous Web version of this story incorrectly said that Christine Lagarde spent a year at a high school in Baltimore. The school is actually in Bethesda, Md., outside Washington, D.C.

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