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“More needs to be done. And the same is true for France; we need to constantly improve the regulations”
- Christine Lagarde, 2009
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Some of the stars who ruled the financial world prior to the global financial crisis have long gone from the limelight. And the economies emerging from recessionary debris have a few new heroes. But Christine Lagarde, the finance minister of France, is the six-foot-tall, silver haired persona who straddles both these worlds. The first female finance minister of any G8 nation, Lagarde has been frequently admired for her able stewardship of France’s economy, which has remained one of the most resilient, despite being one of the first to face the onslaught.
Born to academic parents, Lagarde’s father taught English literature and ancient Greek and her mother was a grammar school teacher. After finishing school, she became a law school student at the University of Paris X: Nanterre. She also completed a postgraduate diploma in labor law and holds a master’s degree in English.
Venturing abroad to dip her toes into the business world, Lagarde joined Baker & McKenzie, a large Chicago-based firm. There, she quickly ascended the ranks by handling major antitrust and labor cases with aplomb. She was made partner in just six years and then named head of the firm in Western Europe. A few years later, in 1999, Lagarde became the company's first ever female chairman. Under her stewardship, the firm’s sagging revenues shot up extensively.
One morning in 2004, Lagarde received a call from then French Prime Minister Dominique de Villepin asking her to join the government. Abandoning her million-dollar-salary job, she became a junior trade minister in President Jacques Chirac's cabinet.
When President Sarkozy took over in 2007, Christine Lagarde was appointed finance minister. With the country running a high unemployment rate and a deficit, Sarkozy and Lagarde joined hands to overhaul the languishing economic scene in France. Together, they developed a $15 billion series of tax cuts and employment-law alterations. The maximum income tax was trimmed from 60% to 50% and restrictions on entrepreneurs were eased. The 35-hour work week was shortened and overtime became tax free. With all these measures, Lagarde’s pro-business, capitalistic slant was clear, earning her the sobriquet, “The American.”
One of Lagarde’s favorite quotes is borrowed from Eleanor Roosevelt, wife of U.S. president Franklin D. Roosevelt, “A woman is like a tea bag: You never know how strong she is until she gets in hot water.” And strength is what Lagarde displayed during the financial credit crunch. France swiftly unveiled a $33.1 billion stimulus package along with a series of measures including tax breaks and social benefits to revitalize the economy. Although it appeared that the steps were unpopular, with millions of French taking to the streets in protest, today France remains one of the few that wobbled but did not crumble.
Since the crisis, Lagarde has become a strong advocate for international financial reforms such as the regulation of investment vehicles like hedge funds and the restriction of bankers' pay. Her calm yet strong voice of candor concerning regulations and policies were acknowledged by the Financial Times, which granted Christine Lagarde the European finance minister of the year award. Marco Annunziata, chief economist at Italy's Unicredit and one of the judges, says the French minister “played a prominent role in the management of the crisis at the international level.”
Lagarde does stand out in other ways as well. As a teetotaler, a non-smoker and vegetarian, she is definitely not an embodiment of the typical French joie de vivre. Fluent in English, she is a fitness fanatic who was once a champion synchronized swimmer, a sport she gave up with characteristic wit- “Legs up in the pool is not the expected behavior of the minister of the economy.”
Still, as France emerges from the crisis, the 53-year old winner of France’s highest accolade, the Legion d’honneur, has her work cut out for her. Although the economy is forecast to shrink 2.2% this year, 1.4% growth is expected in 2010. Despite protests and criticisms, thanks to Lagarde, the French may have the last laugh after all.
Image Credit: MEDEF on Flickr under a Creative Commons license
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