How would you characterize Christine Lagarde’s thinking?

Christine Lagarde is among the 2012 Global Thinkers of Foreign Policy magazine. Which are her strongest assets; which are her weaknesses? Read few comments by Anna VisviziAssociate professor, DEREE – The American College of Greece.

Christine Lagarde was included on the list of 100 Global Thinkers for a specific reason, i.e. “for investing in the Middle East when others would not”.

Although, it is flattering for any individual to be singled out in the international context, we should not be misled by the List of 100 Global Thinkers. The List could be questioned for a number of reasons, e.g. it is questionable whether all names included therein do deserve this kind of distinction; similarly, the calibre/weight of respective individual’s contribution to ‘global thinking’ is not comparable. These thoughts

notwithstanding, the following can be said about Christine Lagarde and her leadership skills/style:

• By offering financial assistance to several countries in the Middle East, “when others would not”, Lagarde proved either her political imagination or her ability to identify and to follow the advice of knowledgeable advisors.

• Acting as a global leader, carefully managing balances between the developed and the developing countries at the IMF forum, Lagarde continues the work of her predecessor, i.e. D.Strauss-Kahn, aimed at re-defining the role of the IMF and re-instating it on the international scene.

• Obviously, Lagarde is capable of efficient network building and her interpersonal skills serve as a key to her success.

• Given the publicity that the position of the IMF Managing Director offers, in combination with Lagarde’s ability to project an image of a serious and impartial professional, Lagarde has become a role model for a great number of aspiring women worldwide.

From a different angle, this new political visibility creates a rare opportunity for Lagarde to think of the possibility of becoming the next President of the Republic as a viable option.

Having said that, some shadows in Lagarde’s image as a global leader have to be pointed out. These can be derived from a brief assessment of Lagarde’s stance toward the crisis in Greece and the way of addressing it. That is,

• Similarly as other European leaders, and in line with the mainstream approach that prevails in the Eurogroup circles, Lagarde misses the point as regards the causes of the sovereign-debt crisis in Greece.

• Most importantly, she does not seem to see the connection between the escalation of the crisis (as evidenced by deep recession and a permanent risk of Greece’s insolvency) and the inappropriate way of addressing it. That is, on the one hand, and wrongly so, Lagarde believes that tax evasion is the main culprit behind Greece’s predicament.2 On the other hand, she does not seem to be willing to consider the possibility that the fiscal adjustment and reform programme implemented in Greece upon the advice of the IMF officials may be wrong.

• So far the tax-based fiscal adjustment, proposed by the IMF, brought about only deep recession, did not reduce the risk of Greece’s insolvency, and did not tackle Greece’s greatest problem of all, i.e. bloated public sector and excessive government expenditure.

• The above suggests Lagarde’s propensity to follow well-established stereotypes rather than to question them.

• This inability of a former minister of finance (sic!) to consider alternative ways of navigating the crisis, e.g. by capitalizing on the expansionary fiscal adjustment hypothesis, is deeply worrying.

• It suggests that Lagarde lacks the basic virtues of a good leader, i.e. originality, reflection, self- reflection and self-criticism.

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