The last time I met Christine Lagarde, 55, the recently appointed head of the International Monetary Fund, I could not help staring at her shoes. Yes, I know that sounds trivial at a time when the eurozone is in meltdown, America’s Congress is gridlocked over fiscal policy and investors are worrying about rising social strife. But Lagarde’s footwear was revealing. As she sat on a vast white sofa in the high-ceilinged managing director’s office in Washington, DC, she was not wearing the clumpy footwear of a woman trying to break into a man’s world; nor the sky-high power stilettos seen in New York. Instead, her navy low-heeled court shoes reeked of a self-confident, je-ne-sais-quoi French elegance. They were exceedingly feminine, but practical and brimming with power.
It is an apt metaphor for the woman herself. Six months ago, Lagarde strode into the history books in her courts when she was named the first-ever female managing director of the IMF, replacing Dominique Strauss-Kahn, her French predecessor. It was an ascent marred by controversy. Strauss-Kahn was forced to resign earlier this year amid a sex scandal involving a New York hotel maid. And when Lagarde was initially proposed as his replacement, many emerging market countries complained – with some justification – that it looked outdated to give France the “right” to provide another IMF head. After all, these days it is countries such as Brazil and China that are providing growth in the global economy. And Lagarde seems ill-placed to act as a neutral player in respect to the IMF’s biggest current headache: the eurozone. Her last job was to serve as French finance minister, where she also scored another “first”, being the first female in that role in any Group of Seven (G7) country. That leaves her enmeshed in the mess.
In the end, Lagarde elegantly side-stepped the bickering, helped by her widespread reputation for great competence – and her considerable charm. And now, as she sits on her sofa at the IMF, she confronts not one, but two huge tests. With Europe and America teetering on the edge of turmoil, investors and politicians are desperate to know whether there is anything that the IMF and Lagarde can do to stem the sense of panic. Can she find a “solution” for Greece or Italy, or even for her native France?
But Lagarde is also being watched – as a potent female watershed. Never before has a woman held such a powerful position in global finance; the world of money has hitherto been dominated by men, not just inside banks but in bureaucracies too. Lagarde herself has often lamented this pattern, joking, for example, that the financial crisis might have been different if there had been “Lehman Sisters” and pointing out that the euro’s “fragile” foundations were created by its “founding fathers”, not mothers, since “regrettably, there was no woman at the table at the time.” Or, as she recently told me on the telephone: “I wish that there were more women in finance – I think it would be much healthier. We don’t know if it would have been different with more women [in 2008] but my intuition tells me it possibly might have been.”
But now Lagarde – like Angela Merkel of Germany – holds real power. So can a woman in charge of the IMF really make a difference? Will she blaze a path for others to follow? Or will she end up being crushed by the bureaucracy and the policy nightmares besetting the west and the IMF? “I know other people regard me as a role model, some young women look at me for inspiration,” she says. “Personally, I don’t like to inflate my head with this thought. But it is like that old idea of Sartre, that you are what other people see you as. It is a responsibility.”
By her own admission, Lagarde has always been a determined and responsible character. She was born in 1956 in Paris to devoutly Catholic, bourgeois parents. The family subsequently moved to Normandy. Her father was a university professor and Lagarde – who has three younger brothers – grew up in a disciplined yet loving environment, studying at the lycée in Le Havre. As a teenager, she was a keen girl scout and a dedicated member of a synchronised swimming team, which achieved glory in the French national competitions. She says the experience taught her to “hold her breath” but also to work well in organised teams.
However, in her late teens, two formative events occurred. First, her father died, leaving her widowed mother supporting the family at the age of 38. “My mother was a very strong character,” Lagarde recalls, explaining that she “learnt a lot from her”. Another crucial female role model was her grandmother, “a nurse in the first world war and an amazing person, who emancipated herself from a marriage she did not like.” The second life-changing event occurred when the young Christine won a scholarship to study for a year at the exclusive Holton-Arms school in Bethesda, near Washington, where she learnt English and, more importantly, became enmeshed in Anglo-Saxon traditions and thinking. She subsequently did an internship for a US senator in Washington, but then studied law at the University Paris X. After that, she applied to enter the Ecole Nationale D’Administration (ENA), the institute that is the crucial breeding ground for French civil servants. To her chagrin, however, she was rejected twice. So, after a master’s degree in political science, she joined the large American law firm Baker & McKenzie in Paris in 1981.
Lagarde rose quickly through the ranks, impressing everyone with her determination and competence. But within a few years, she encountered the classic female “juggle”: after marrying in her twenties (the marriage did not last) she had a son when she was 30, and then a second son two years later, just after being promoted to partner. “I am an old timer – in those days we [working women] just had to prove ourselves and get on and be brave,” she recalls. “I was working until the last minute for both of my pregnancies and my children were very clever to be born in May and June, so I was able to take the summer off and do the breastfeeding, and then go back to work after the summer.
“I would say that in general it is easier in France than in the US to be a working mother – there is not the same kindergarten system as in France,” she adds. “I am happy to say that at the Fund there is a crèche – if you come to the Fund early in the morning, you will see babies, lots of babies in the foyer, being brought in!”
She continued her rise unabated, juggling children and career. She admits that she was never a “tiger mother”, since she “just didn’t have the time” to spend hours supervising her sons’ homework. “There is always the guilt, of course. But it is who I am. For me the best moment is when your child gets older and tells you that they value what you have done, rather than you being always with them. When [one of her sons] was 11, he said that to me – it was a very important moment for me.”
Then, in 1999, she was named as the first female – and non-American – head of Baker & McKenzie and developed a practice in Brussels, which brought her to the notice of the French government.
In 2005 she changed career, moving to Paris to become trade minister, then agriculture minister. In 2007, when Nicolas Sarkozy became president, he named her finance minister – just on the eve of the financial crisis.
In that role she swiftly won numerous plaudits across the G7, particularly for the calm, competent way that she handled the financial disasters, playing a crucial insider-outsider role. The fact that she was a woman operating in the Elysée Palace made her unusual. As did her lack of training at the all-important ENA. What was most striking was that colleagues sometimes referred to her as an “Americaine”, since she not only spoke English in an idiomatic, near-native fashion, but understood Anglo-Saxon ways.
That “Americaine” tag did not prevent her from defending French interests forcefully: she clashed with Hank Paulson during the financial crisis and was sometimes highly critical of US policy. (When she appeared in Inside Job, an Oscar-winning American documentary film about the financial crisis, she was asked how she reacted when the US let Lehman Brothers collapse. “Holy cow!” she declared, in one of the most memorable – and scathing – lines of the film.) But notwithstanding her criticism of Washington, the years Lagarde spent as a lawyer in an American company made her sometimes act with Anglo-Saxon style. She has little compunction about firing underperforming staff. She is also adept at juggling the American press – and the political world – with a charming, self-deprecating sense of humour. In 2009, for example, she appeared on an American television chat show; and once on set, she whipped out a French beret and proceeded to crack numerous jokes.
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So how will Lagarde fare, now that she has moved from the Elysée to Washington? She has been praised by many western leaders for her cool head and persistent style. “Wherever she has worked, she has had a strong voice and impact,” Robert Zoellick, president of the World Bank, observed earlier this year. Meanwhile, shortly after her appointment, Timothy Geithner, US treasury secretary, commended her “broad experience” – and the fact that when she had been French finance minister, she had engaged successfully with the wider community while also defending French interests with a passion. George Osborne, the UK’s chancellor of the exchequer, has declared himself a fan, calling her appointment “good news for the global economy and Britain”, since she is “the best person for the job”.
Colleagues at the IMF say Lagarde has already delivered a change of tone; whereas Strauss-Kahn used to issue orders and rely on a narrow coterie of advisers, Lagarde has taken pains to consult a wide group of people. “My management style is more inclusive. Perhaps you can say that is because I am a woman – I do think that women tend to be more inclusive. I am very decisive when it comes to organising the team, but I do consult widely and hear many ideas before rushing in,” she explains.
This approach may have drawbacks, she admits. Some observers fear that she is going to be excessively orthodox in her approach, either because she is seeking consensus, or because her unconventional background might – perversely – make her less willing to be unconventional in policy. This worries some critics, who argue that the current crisis requires bold economic strategies. To add to the concern, Lagarde does not have a degree in economics, forcing her to rely on advisers.
However, she has already displayed some willingness to be a little bold: soon after assuming the role, she infuriated eurozone leaders by pointing out that European banks were urgently in need of more capital. And, she argues, an inclusive approach is now a strength, not a weakness; the days when anybody – or any single power – could dominate the agenda are long gone. Economists alone cannot solve disasters.
As part of that “inclusion” drive, Lagarde continues to try to get more women involved in senior positions. These days, she is trying to put the Strauss-Kahn scandal behind the IMF. “There was a healing process in the first couple of weeks [when I arrived] and a sense that we needed to turn the page with purpose. I think it was helpful being a woman for that,” she says. However, she is now more focused on pushing the IMF to meet its target of 30 per cent women in management positions. “My board doesn’t look good in terms of female participation, but my senior executive level does,” she says. “Boards can be very deceptive – you see many companies today that have some women on the board, but the senior management is very male.”
She also continues to promote the wider cause of women. Last year, Lagarde declared that she backed the controversial idea of introducing female quotas into the boards of European companies. “This is good for companies too. When I look what happens when you have more women on boards, there is a difference – the general tendency of women is to adopt a different risk profile, in terms of portfolio management, say.” After all, she adds, most women tend to have a more holistic view of life, partly because they – like she – have spent so many years trying to manoeuvre family and work.
These days her own “juggle” remains challenging. Lagarde has been with her partner Xavier Giocanti, an entrepreneur, for the past five years. However, he is currently shuttling between France and the US. And while Lagarde lists her hobbies as scuba diving, yoga and gardening, she laments that this summer she did not have an opportunity to pick the fruit in her house in Rouen, Normandy. Yet, as she travels about, she continues to exhibit an enviably serene, authoritative air, clad in a classic suit.
“A strong influence on me was the first boss I ever had – she was a woman, from Belgium, and very strong and elegant,” she recalls. “She was always very attentive to how she looked, and it taught me to dress properly. When I came to America and saw a lot of working women in the 1980s and 1990s who always dressed like men, that had an influence on me too – to not do that.” Her favorite clothing labels, she admits, include Chanel and Ventilo. “I am lucky because I had parents who were tall and slim, and my own size has not changed, so I have been wearing things for 20 years.” Discipline, presumably, also helps maintain her slender shape: Lagarde exercises a great deal and never drinks alcohol.
So, I ask, does she now have a stylist? For a second, she sounds completely baffled; it is the first occasion I have ever heard her lost for words. “A stylist? For my hair, yes! But for my clothes? No! Why? It is my style.” Perhaps this is the most encouraging thing of all.
This article originally appeared in Financial Times. Click here to read more coverage from the Weekend FT.