Magazine article Foreign Policy

Christine Lagarde: Managing Director of the International Monetary Fund

Magazine article Foreign Policy

Christine Lagarde: Managing Director of the International Monetary Fund

Article excerpt

When Christine Lagarde took over the International Monetary Fund in 2011, the bank was in crisis. Its previous chief, Dominique Strauss-Kahn, had resigned amid allegations of sexual assault. But restoring the IMF'S profile wasn't Lagarde's biggest challenge at the time. That honor went to the eurozone. Lagarde buoyed debt-distressed European countries, helping to negotiate a bailout deal for Greece and raising more than $400 billion for a global rescue plan. Credited with helping to save Europe's economy, Lagarde is now leveraging the bank's resources in other ways. This year, the IMF pledged $17 billion to Ukraine, and in September it committed $130 million in emergency financing to West African countries embattled by the Ebola epidemic. "If more is needed," Lagarde said at an October news conference, "it will be there."

Foreign Policy spoke with Lagarde in Washington, D.C., prior to presenting her with the magazine's annual Diplomat of the Year award in late October. Lagarde discussed risks to financial stability, the IMF'S current international role and reputation, and her frustrations with lawmakers in the world's largest economy.

When I arrived on July 4, 2011, I found an institution that was under shock. The precipitated departure of the previous managing director had occurred under circumstances that put the institution on the front page of pretty much every newspaper around the world. With staff that was discouraged and a bit at a loss as to where the compass was going to be. My first priority was, then, to try to bring people together.

I think the fund is and will be as relevant as ever, if not more. The decision to downsize the fund in 2006-2007 was very misguided. There are ebbs and flows. We have seen moments of economic euphoria, during which members suddenly question the relevance and necessity of the institution. Then comes the [economic] crisis, and everybody struggles to urgently increase their resources. At the end of the day, who is available in a very short period of time to put money on the table? Who is there to lend credibility to reforms that a country is prepared to undertake when it's in trouble? …

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