Christine Lagarde ,Managing Director, IMF
has completed high school in Le Havre and attended Holton Arms School in Bethesda (Maryland, USA). She then graduated from law school at University Paris X, and obtained a Master’s degree from the Political Science Institute in Aix en Provence.After being admitted as a lawyer to the Paris Bar, Christine Lagarde joined the international law firm of Baker & McKenzie as an associate, specializing in Labor, Anti-trust, and Mergers & Acquisitions. A member of the Executive Committee of the Firm in 1995, Christine Lagarde became the Chairman of the Global Executive Committee of Baker & McKenzie in 1999, and subsequently Chairman of the Global Strategic Committee in 2004.Christine Lagarde joined the French government in June 2005 as Minister for Foreign Trade. After a brief stint as Minister for Agriculture and Fisheries, in June 2007 she became the first woman to hold the post of Finance and Economy Minister of a G-7 country. From July to December 2008, she also chaired the ECOFIN Council, which brings together Economics and Finance Ministers of the European Union.
The International Monetary Fund (IMF)
is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. The IMF works to foster global growth and economic stability. It provides policy advice and financing to members in economic difficulties and also works with developing nations to help them achieve macroeconomic stability and reduce poverty.
Namrata of NDTV 24X7 spoke with Christine Lagarde, the first woman to have been elected to MD’s post in IMF's 66 year history. Lagarde says, “We have conducted a review of the Indian economy lately…. India has a strong case.”
What is your opinion on the radical shift in terms of the Greek default?
As far as Greece is concerned, a lot of work has been covered over last year. For funds, we have approved the fifth tranche of the program, which was negotiated year ago. We are expecting Europeans to come up with some sort of resolution, but there will be a lot more work to be done in order to restore the situation. The two main objective of the fund is to make sure that the debt of the country is sustainable and there is return to access market. These two parameters will be mainly kept in mind for any further proposals, discussions and additional work to be engaged with the Greek authorities. So I will not want to speculate, who will do what, what kind of default will there be, whether there will be a default or no, and will the default be selective or non selective.
Would IMF be open to outright Greek default or a selective Greek default just because the market believes that only selective Greek default would make better fiscal consolidation in Greece?
It has to be a comprehensive package, so I am not going to address it. There have been enough piece meal jobs in relation to Greece, as well as to other matters. I’m interested in the overall picture, so don't expect me to identify a single component. The fund will indeed participate in the drawing of that picture.
This is the Euro Zone's third largest economy. We had heard about the peripherals of the smaller economies with the likes of an Ireland or Portugal maybe, how worried are you about Italy's concerns right now? We have got those bond yields at Euro Era records
We are all watching the market carefully and are expecting the Europeans to come together in this matter. Italy is a very sizeable economy in the Euro Zone. In the past, Italy had demonstrated its ability to come up with and deliver significant austerity measures. It has recently put together an additional set of measures that will aim at reducing deficits, restoring the debt siituation on a solid trend. There are clear effects from one country to other to make sure we are attentive
Are you worried about the spread risk than the contagion fear risk. Will Italy, if not another Greece, be the last straw that breaks the Euro Zone's back?
I am extremely attentive, as we all are, and we will remain very cautious and attentive.
Since you are newly appointed, are you in conversations about alternative ways of resolving the Eurozone's crisis?
We had a Board meeting on Greece, my Deputy Managing Director is on the ground representing the IMF at the Euro group meeting. I think we should let people to start with their work. There are many things lined up, which is not possible to finish in just a day. What is decisive is there is a collective resolve to address the sovereign debt issues, particularly obviously within the Euro Zones, but more generally at sovereign state levels
Shifting gears to India now, you have visited India as a part of your campaign. What is your assessment of India both in terms of its politics and its economy?
You will appreciate that I will be little more reserved about politics because it is not for me to comment on the political situation of India. I was very pleased to have stopped in India and to have been able to meet political leaders of the highest levels and it was joy to meet with your Prime Minister. The economic situation of India is clearly strong when you look at growth numbers, when you look at the trend of the country. It is indeed an area of the world which is a growth driver of the global economy and my good friend the Minister of Finance for India is clearly looking at that very carefully and I certainly pay tribute to his ability to do so. We have conducted a review of the Indian economy lately and obviously those findings in growth, in particular concerning inflation risks clearly showing that India has a strong case. I discussed with the leaders of your country the price of commodities, the effect that it would have on the population and it is clearly a concern that we all have, agricultural commodity prices in particular be kept under close surveillance and that they could be monitored most efficiently.
How do you envision India's role in the IMF in term of a wider influence, more voting rights and a greater say?
Do you know for instance one of the largest group of staff members and the leading economists in the IMF is Indian. There are lots of Indian talents within the IMF and I very much look forward to working with them. They are extremely well educated, thoughtful with depths with insight, about not only about their economy, but the economies around the world, and it is very good to have that degree of diversity developed by the Indian nationals. So I will make sure that we take full benefit of their skills and talents.
The governance reform will continue, will be pursued and clearly, as the world is growing into a significantly more balanced place, where emerging markets are taking a bigger lead in the development of growth around the world. They share a representation within the organization as well. Because the IMF, to be representative of full interest, has to be legitimate, and as a result, must make enough space and room at the head table where emerging markets can be properly represented.