The appointment of Christine Lagarde has brought many questions to the proverbial discussion table. (No, she is not just a scary French lady) They range from whether or not she will be able to maintain neutrality while dealing with the financial crises of the world to the effect of her appointment on women in positions of power.
Let’s take this one at a time.
Elle est française (She is French)
A primary characteristic that everyone notices is the fact that she is French. Why is this important? It is relevant when one reviews the history of IMF directors. Of the 11 Managing Directors that have headed the IMF since 1951, Lagarde is the 4th Frenchman to rise to the job. She follows on the heels of Dominique Strauss-Kahn, a Socialist Party leader who had to resign his position when he was arrested in New York for alleged rape and sexual harassment.
The question that all commentators are obsessed about is: Can Lagarde maintain a stable world financial order without providing preferential treatment to European economies? Anyone with an ounce of political knowledge knows that the economics of Greece, Portugal and Ireland have sunk the prospects of a quick European economic recovery. However, the camera is now focused upon Spain and Italy, both of which are struggling with sovereign debt problems, and in Italy’s case, an unstable political situation to boot. The fear is, if Italy and the European Central Bank (ECB) were to throw in the towel and request a bailout from the IMF, the IMF will be lenient about the terms of the bailout. This is an issue that especially incenses developing economies, who have – for the past 4 decades – received extremely harsh bailout structures from the IMF in the form of Structural Adjustment Policies. So, is it possible for Lagarde and the IMF to maintain neutrality and enforce strict bailout structures upon European economies? The political evidence does not show an optimistic outcome.
Why? Point one: European nations and the U.S.A. head much of the management of the IMF. Politically and economically, it is in their best interests to secure and maintain a stable European economy. Unless Europe and U.S.A are ready to secede some political power to Africa and Asia, it is unlikely that the same policies that were applied to Africa and Asia would be applied to Europe. Point two: The Euro needs to survive. Simply put, the EU has invested too much of its resources to defend and protect the Euro from collapse thus far. It is now the dominating currency in most of Europe – with the exception of Northern and Eastern Europe. The Cold War concept of mutually assured destruction applies here. If the IMF does not save the European economies, it goes down with them. Especially if it’s Spain.
Lagarde as a woman
Besides being the 4th Frenchman, Lagarde is also the first woman to ever head the IMF. Though she might have been the best person for the job, one cannot ignore her gender in a sea of men – honestly, how can you, when it’s the ratio of testosterone : estrogen dominance is 24:1. This trend follows a long and complicated history of women’s rights, education, career opportunities and social structures. In the context of the IMF, Lagarde is thus far, European first, female second. This is unsurprising, considering her lack of active political participation in ‘championing’ women’s rights. Sure, this can easily descend into a discussion about how female leaders should deal with their position of power, but we’d have to cover everything from suffragettes to second-wave feminism.
Should Lagarde’s appointment read as a prophecy for greater leadership roles for women? Maybe. Perhaps she will set a benchmark where women are empowered to achieve whatever great visions of leadership they might have. After all, if the Motley Fool crew and Louann Lofton are right, women are better at finance. And finance runs the world, no?
Note: Motley Fool and Louann Lofton co-authored “Warren Buffet Invests Like a Girl – and why you should too”