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Lagarde's the right choice for Europe's central bank

It might not be the hardest job in the world - just among the hardest - but it likely requires a lot of patience. Christine Lagarde, who is on track to be the next head of European Central Bank (ECB) when the EU's top positions change hands in the fall, looks to have the required skillset. As the current head of the International Monetary Fund, she is known for her measured personality, savvy political instincts, and deep connections in global finance.
If all goes as per plan, she will replace outgoing ECB President Mario Draghi as the next to head to guide monetary policy in a system rife with challenges. The euro is used by 23 countries, but each sets its own fiscal policies, leaving the ECB with fewer levers to pull in efforts to help keep the Europe's economies on an even keel and face the inevitable challenges inherent in such a complex design.
The central bank president also has to reach some form of accommodation with the rowdy political crowd in Europe and serves as a lightning rod for dissent. Particularly in southern Europe, where currency devaluation was a tool often used, the euro and its policies are often blamed for economic malaise that has lasted decades.
Besides, Lagarde will be the first woman to head to the ECB if her candidacy is formally approved. Yet it is telling that her gender is a minor aspect of her public story today. She has been 'the first' several times before - she was the first woman chair of the global law firm Baker McKenzie; the first woman to serve as a finance minister from any G7 nation (France); and the first to lead the IMF. There is little talk of 'glass ceilings' and more discussion about her qualifications. Among those is a steady, steely determination.
"I know Christine Lagarde as the boss of the IMF. I know her as a tough lady, as somebody who knows what she wants, who is very clear on giving directions," Dutch Prime Minister Mark Rutte told the media. "When you come to her to get a loan, (she is) very tough on conditions, so I wouldn't like to be the European country who needs to go to the ECB asking for favours."
And she is not an economist, which many also see as a good thing. The French lawyer is viewed as a leader who can possibly inspire confidence, not a theoretician who crunches numbers. "It's a big break from the past, but one that has been needed," said Mohamed El-Erian, chief economic adviser at Allianz, the German insurance giant. Lithuanian Finance Minister Vilius Sapoka said the ECB is a "rocket science institution" that needs someone with the "necessary skills and I think in this regard Lagarde is qualified".
Her job as head of one of the world's three most important central banks will start as Europe faces yet more turmoil. Lagarde's first day on the job is set for November 1, the day after Britain is due to leave the European Union.
But that shouldn't be daunting. She has experience working in extreme conditions. Lagarde was the French finance minister during the global financial crisis. During her stint at the IMF, she organised bailouts for Argentina and Greece. She might need all that experience and more as the global economy faces a range of headwinds.
She herself has said the global economy is at a "delicate moment".
"Only two years ago, 75 per cent of the global economy experienced an upswing," Lagarde said in a recent speech. "This year, we expect 70 per cent of the global economy to experience a slowdown." Signs of weakness have been particularly acute in Europe. The latest ECB estimate places Eurozone growth at a sluggish 1.2 per cent this year.
Lagarde's tenure on the firing line battling severe economic conditions seems to have not only built determination but also accorded her with a perspective that embraces flexibility.
While at the IMF, she seemed to have learnt that austerity and balancing the books are not the only answer.
When Europe's sovereign debt crisis exposed the system's weaknesses, Lagarde showed her conservative bent and proposed urgent recapitalisation of banks, urging central governments of the Europe to shore up the funds. She continues to issue similar calls today.
Yet when Greece needed a bailout through the IMF, she changed courses on austerity.
Under her watch, the IMF publicly admitted austerity had been counterproductive, killing off growth and causing unneeded suffering. She was a rare voice supporting significant debt relief for Greece to get its economy and government finances back on track.
The determination and ability to endure could in part come from her early years. Her father died when she was 17 and her mother, widowed at age 38, bought up Christine and her three younger brothers alone.
"My mother was a very strong character. I learned a lot from her," she said. Lagarde was once a member of France's national synchronised swimming team and won a bronze medal in the country's national championships.
That ability to keep her head above water will be surely put to the test soon as she jumps into some of the deepest political waters on the planet.
Jon Van Housen and Mariella Radaelli are editors at www.luminosityitalia.com