As president Sarkozy’s finance minister, Christine Lagarde ran up one of France’s largest ever budget deficits and moved so slowly on reforms it cost him re-election. As managing director of the International Monetary Fund, she collaborated in a ruthless deflation that created the worst recession in recorded history in Greece. She then led the IMF into potentially its worst ever losses with a failed bail-out of Argentina. Wherever Christine Lagarde goes she leaves an economic train wreck behind her.
And now, extraordinarily, she has been put in charge of the most fragile currency in the world. Today, Lagarde moves from the IMF to the presidency of the European Central Bank.
On the surface, that might appear nothing more than switching one technocrat for another. Most central bankers don’t leave much of a mark on the world. Lagarde may well be different however.
While her predecessor, the Italian Mario Draghi, was a brilliant economist who just about kept the euro afloat, Lagarde, an intensely political lawyer, may well be the person who crashes it.
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