Brussels: During a recent appearance on ‘The Daily Show’, the host Trevor Noah asked Christine Lagarde if she was familiar with the “glass cliff’. It is the phenomenon, he said, of handing a job to a woman at a hazardous moment, making her success highly improbable, and giving men some deniability.
Hadn’t Lagarde landed on a glass cliff when she was appointed head of the International Monetary Fund in 2011, Noah asked, a time when many countries were still reeling from the financial crisis?
“Correct! You’re right,” Lagarde replied. The job, she went on, “was intimidating.” But the circumstance — a woman elevated just in time to oversee a fiasco — felt familiar.
“Whenever the situation is really, really bad,” she said, “you call in the woman.”
The woman has been called in again. On Tuesday, Lagarde was named the new president of the European Central Bank, the first woman to be chosen for the post. The role will make her one of the most powerful figures in international finance, giving her a leading hand in guiding the world’s second largest economy. She will succeed Mario Draghi, an Italian economist who will be remembered for steering the Eurozone — the 19 countries that use the euro — through a perilous era, including the near bankruptcies of Greece and Spain.
Today, the job does not appear riddled with the same acute dangers. That said, until recently, Lagarde considered the notion of running the European Central Bank a tad daunting. In part, that was because of the roiling effects of trade wars, which have been weighing on the region’s economy. In an interview with The Financial Times in September, she sounded annoyed by speculation that she was a contender for any number of top spots in Brussels or Frankfurt, Germany, where the ECB is based.
“I have a very important job here that I want to do,” she told the newspaper, “and I’m not going to leave that beautiful vessel when there might be rough waters out there.”
What exactly changed her mind is unclear, but the European Central Bank will now be led by a woman who, through charisma and intelligence, stands with the most recognisable figures in global finance. She is equally comfortable among the diplomatic elite at a G20 summit and the business titans at the World Economic Forum in Davos. With her Chanel suits and distinctive swirl of white hair, she has appeared not just on US chat shows but in Vogue and on Forbes’ list of the most powerful women in the world.
She has a singular resume that includes many other firsts. She was the first chairwoman of the Chicago-based law firm Baker McKenzie, and the first woman to become finance minister of a Group of 8 economy. And she is surely the first central banker who was a competitive synchronised swimmer, having spent three years on the French national team.
During an appearance the NPR show ‘Wait Wait … Don’t Tell Me!’ she delved into some of the complexities of the sport.
“It’s very weird,” she said, “because when you’re a synchronised swimmer, if you shave your legs completely, you lose sense of where you are and how well you’re doing.”
Promoting women has been a recurring theme of her career. She has talked about the moral urgency of gender equality, but to anyone unmoved by such arguments she will enumerate the economic upsides, too.
“Our own research bears this out,” she wrote on the IMF’s blog in September. “A higher share of women on the boards of banks and financial supervision agencies is associated with greater stability. As I have said many times, if it had been Lehman Sisters rather than Lehman Bros., the world might well look a lot different today.”
PROFILE: Christine Lagarde
Already one of the world’s most prominent policymakers, Christine Madeleine Odette Lagarde, the managing director of the International Monetary Fund, will head up the European Central Bank. Lagarde, 63, has led the IMF since 2011 — lifting up its profile, though not without controversy, through the aftermath of the global financial crisis and the Eurozone crisis.
Although not a trained economist, Lagarde worked as a prominent corporate lawyer specialising in antitrust with a major Chicago-based firm, Baker & Mackenzie. She rose through the ranks to lead the firm’s Western Europe practice and became its first chairwoman in 1999.
In the mid-2000s, Lagarde turned to public life in France, holding several Cabinet positions during the conservative presidency of Nicolas Sarkozy, including that of finance minister. Lagarde is credited with restoring the profile of the IMF after replacing Dominique Strauss-Kahn as its leader after he was accused of sexual assault in a case that was later dismissed.
In 2011 she became entangled in a corruption investigation involving a French businessman, though she was not herself a suspect in the case. In 2016, a French court found Lagarde guilty of negligence in relation to the same case, but the court did not impose a penalty.
What does it mean?
• As the European Union’s importance on the world stage grows, its politics is fragmenting: Smaller, more ideological parties, including populists and nationalists, have made gains and weakened the traditional, more centrist parties. How have the bloc’s leaders responded? By calling on strong consensus builders to head up its key institutions.
• For all the drama, it is important to remember that the real power in the European Union rests with its member states and their leaders, not with the heads of the bloc’s bureaucracy.
• Even the Commission president, the most important of them, must carefully coordinate regulations and legislation with heads of state and government. All these jobs, except for the head of the bank, must be approved by Parliament.