Minister who rose by not making a drama of the financial crisis


IN CHRISTINE Lagarde’s light-filled, modern office in the finance ministry in Paris, the first-time visitor’s eye is drawn to the dozens of framed pictures that cover one of the walls. There is the obligatory portrait of president Nicolas Sarkozy, but most of the space is taken up by newspaper cartoons featuring the tall, silver-haired figure of Lagarde herself, complete with their caustic captions.

There is also a front page of the Economist, from 2009. Under the headline “Europe’s new pecking order”, it shows a satisfied French president looking down from his plinth at German chancellor Angela Merkel and her “modell Deutschland” (German model), while the British prime minister and his “Anglo-Saxon model” barely peep out from a manhole. Lagarde is someone who can laugh at herself, the wall indicates. But she does so from a position of supreme strength.

If European leaders have their way, Lagarde will soon be taking down her pictures and shipping them to the headquarters of the International Monetary Fund (IMF) in Washington, where she would replace her compatriot Dominique Strauss-Kahn as managing director.

Becoming the first woman to lead the IMF would be a crowning achievement for someone who has made a habit of breaking new ground. The first woman to chair Baker & McKenzie, a large US law firm, Lagarde then became France’s first woman finance minister, the first woman in any G8 country to hold the portfolio. As of this month, she is the second-longest serving finance minister since the creation of the current French Republic.

Born Christine Lallouette in Paris on January 1st, 1956, she was in her teens when her father, a professor of English, died. Raised with her siblings by her mother and grandmother, Lagarde, a member of France’s synchronised swimming team in her teens, completed her undergraduate studies in Le Havre before obtaining a postgraduate diploma in labour law from the University of Paris and a master’s in English from the Holton-Arms school in Maryland.

She joined Baker & McKenzie’s Paris office at 25 and rose quickly through the ranks of the Chicago-based firm, specialising in labour and antitrust and earning a reputation as a sharp negotiator and hard worker.

Lagarde had been working in the US for more than 20 years when, in 2005, then prime minister Dominique de Villepin offered her the post of trade minister. She accepted.

In 2007, after two months as agriculture minister, Sarkozy appointed her to the finance ministry.

Now 55, Lagarde has never held elected office, and her lack of political experience was exposed by clumsy interventions during her early days in government. In autumn 2007, as rising petrol prices exercised the public, she advised: “Let’s use our bicycles.”

At the end of her first year as finance minister, some whispered about how long she would last. Then the financial crisis came and she began to shine.

Her steady, assured handling of the aftermath of the Lehman Brothers collapse in 2008 drew international praise. She seemed to grow in stature every month, her mastery of the brief, her seriousness and her likeable personality allowing her to build vital allies in Washington, Berlin, London and elsewhere. Her relationship with Merkel, for example, is closer than that of Sarkozy. In 2009, the Financial Timesvoted her the best finance minister in Europe.

She has received plaudits for the key role she played in approving the bailout mechanism to aid struggling members of the euro zone in May last year, and has been vital to France’s presidency of the G20 this year.

As a non-politician (she voted for the socialist François Mitterrand in 1981), Lagarde often gives the impression of remaining above the domestic fray, notwithstandingher faithful adherence to Sarkozy’s positions. Her reputation outside France improved her standing at home: by last autumn, when Sarkozy was considering whether to replace prime minister François Fillon, she was a favourite for the job.

Support for Lagarde’s nomination to the IMF grew over the weekend with a public endorsement by the British government. One of the obstacles between her and a job she is believed to covet, however, is a legal row over her decision to settle a dispute between the state and the businessman and former minister Bernard Tapie. She denies wrongdoing and has suggested she is the victim of a smear campaign. Not that it has cost her that sense of humour. “If I go to prison, will you bring me oranges,” she asked journalists last week.