CORRECTED: Lagarde: France's world finance 'star'

25th May 2011, Comments 0 comments

Silver-haired and silver-tongued, Christine Lagarde has cut an impressive figure as the first female finance minister of a G7 power, earning a reputation for grace under fire during the global economic crisis.

If Lagarde succeeds in her bid to be managing director of the International Monetary Fund, announced at a news conference on Wednesday, she would be the first woman to head the global emergency lender.

The IMF's former chief economist Kenneth Rogoff told the New York Times Lagarde was so popular at finance meetings that she was "treated practically like a rock star."

A lawyer by training, the 55-year-old Paris native became France's longest serving finance minister earlier this month, having served in the position since 2007.

Fluent in English, Lagarde emerged as a leading figure in Europe's response to the 2008 financial crisis as the then head of the eurozone finance ministers.

With France currently in charge of the G20 group of the world's largest economies, she has been the pointwoman on efforts to combat the effects of the crisis and reform the global financial system.

Complimented by some for her smooth handling of the monumental crisis and criticised by others for stubborness, Lagarde has become ever present on the world stage.

In 2009, the Financial Times named Lagarde finance minister of the year, citing her resolve in facing the world's worst post-war recession. That year she was also named the world's 17th most powerful woman by Forbes magazine.

Although she studied law and political science, Lagarde soon entered the world of business and finance.

After being admitted to the Paris bar, she joined the international corporate law firm Baker & McKenzie, specialising in labour and anti-trust issues as well as takeovers.

She rose to become chairwoman of the Chicago-based law firm's global executive committee in 1999 and then of its global strategy committee in 2004.

Lagarde returned to France in June 2005, joining the government as trade minister late in Jacques Chirac's presidency.

Her ascension continued under President Nicolas Sarkozy, who named her agriculture minister upon taking office in 2007, and then in an unexpected reshuffle appointed her finance minister.

Lagarde imposed herself as a linchpin of his presidency, giving the ministry a stability it had not seen since the 1990s. Before her, seven ministers had held the office in seven years.

Mistakes, when they happened, were usually not in the realm of finance but trampling on French political sensitivities.

Lagarde landed in hot water after labeling French labour laws "complicated, too heavy" and responsible for freezing job growth.

She also trod on political toes by using "rigueur", a hot-button French word for austerity, to describe a key Sarkozy policy of slimming the bloated bureaucracy by not replacing retiring civil servants.

And when France faced high petrol prices, Lagarde said the French should ride bikes, doing nothing to erase her reputation in some circles as out-of-touch.

But the culture clash never caused an often predicted exit from government. Only recent accusations of conflict of interest have clouded her domestic political horizons.

Earlier this month a prosecutor called for a probe into her handling of a high-profile dispute involving flamboyant tycoon Bernard Tapie that resulted in a 240-million-euro ($345-million) government payout to the prominent Sarkozy supporter, plus another 145 million euros in damages and interest.

Questions have also been raised about an investment by Lagarde in a start-up run by the son of a state-run agency boss she appointed.

But in both cases Lagarde has shrugged off the accusations, calling the Tapie allegations a "smear" and the start-up investment a contribution to help restart the French economy.

"I have a perfectly clear conscience" about the Tapie affair, she told reporters on Wednesday after her announcement.

© 2011 AFP

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