A Chat with France's Finance Minister As oil prices flirt with $90 a barrel and the U.S. dollar sinks, world financial leaders are in Washington, D.C., for International Monetary Fund talks. Christine Lagarde, France's finance minister, offers her insights on the state of the global economy.
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A Chat with France's Finance Minister

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A Chat with France's Finance Minister

A Chat with France's Finance Minister

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ANDREA SEABROOK, host:

Now, the world's top finance officials are here in Washington for the fall meeting at the International Monetary Fund and World Bank. I spoke yesterday with the French finance minister. Her name is Christine Lagarde. I asked her about recent turmoil in the financial markets and whether she and other officials fear a period of real instability.

Ms. CHRISTINE LAGARDE (Finance Minister, France): I wouldn't call it a fear but certainly we are all concerned, and we share the same concern that what happened in the summer - the turbulence or the market corrections that took place and turned into a bit of a global turmoil on the financial markets do not happen again.

SEABROOK: You're talking about the subprime crisis.

Ms. LAGARDE: Yeah.

SEABROOK: The correction in the markets…

Ms. LAGARDE: Yeah. Yeah.

SEABROOK: …around subprime loans.

Ms. LAGARDE: Absolutely.

SEABROOK: Are you pushing for greater regulation of the U.S. subprime markets?

Ms. LAGARDE: We're certainly pushing for accountability and regulations relating to those non-banking establishment that offer credit. And that, generally afterwards, securitize the credit so that risks are completely fragmented and dispersed in such a way that no one really knows what are the underlying behind those risks.

SEABROOK: Let me turn, Christine Lagarde, to a few questions about you as a person and your work in France right now. You spent many years working as an executive with an American law firm - Baker & McKenzie. You were in Chicago for those years. And I've read that you've been referred to now back in France as The American.

(Soundbite of laughter)

Ms. LAGARDE: Yes, that's true. I have to confess an anecdote, actually. I was presenting the budget three days ago and one of the communist member of the national assembly - we still have a few of them - actually addressed me in English just to, probably, you know, pull my legs or take the mick out of me. And his statement will not be recorded in the official gazette as not compliant with the French law requiring that French language be used in the national assembly.

SEABROOK: Well, I gather that being called The American isn't an insult.

Ms. LAGARDE: Oh, absolutely not.

SEABROOK: A big part of your job as a member of the government of Nicolas Sarkozy is to reform the French workplace and, in fact, the French mind to have sort of a more of an American view of the workplace and the work week, in fact.

Ms. LAGARDE: Hmm. Well, as you know, back some seven or eight years ago, there was a law implemented by the Socialist Party - at the time, in power - that reduced the working hours to 35 hours a week. And it's not particularly that number which actually triggered a change in the mindset. But I think it is the whole psyche of quite a lot of French people that changed at the time. And it's what we're trying to reform with President Sarkozy.

His - one of his key messages during his campaign, and one of his key principles, is that work is fine and should be part of the ethics.

SEABROOK: I gather that this has been met, at least recently with transit strikes now over your government's proposed reforms.

Ms. LAGARDE: Yeah. That took place last week. There was a one day of massive strike because what we're also trying to do is to change the pension schemes so that people - instead of retiring after 37 years of service - retire after 40 years of service, which is the general principle applying to all workers except in the transportation sector.

SEABROOK: I have to ask. There is sort of a cultural dialogue here in the United States about the fact that constantly improving productivity and working more is good for business but it takes a toll on people's lives. And I wonder, seeing it from the other side of this issue, what you see is the balance there?

Ms. LAGARDE: You know, it might be a question of striking somewhere in between the American mantra and the French approach. And somewhere in between might be the right way. The French people have elected President Sarkozy to change things and bring a bit of productivity into the system and put work and labor and bit of effort back in the center of the beautiful French equation, which is not only limited to good food, good wine and a few other good things.

SEABROOK: Christine Lagarde, finance minister of France. Thanks very much for your time.

Ms. LAGARDE: Sure.

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