In the coming week, the previous IMF Chief Christine Lagarde on her appointment as the new President of the European Central Bank (ECB). It does so as the successor of Mario Draghi, the economically most important Posts in Europe and is the most powerful woman in Europe. The 63-year-old former French Finance Minister is the first woman to head the ECB. It is considered to be a diplomatic, articulate and well-networked. At the world economic forum in Davos, she is a regular guest.
Lagarde is not an Economist, but a lawyer that has acquired the prestigious law firm of Baker & McKenzie or the think tank CSIS in Washington outstanding political contacts, and in 2007, the French government joined in. In 2008, she was caught in the maelstrom of the Tapie financial scandal, as they a highly controversial compensation payment to the former Adidas chief in the amount of 400 million euros just by waving. In 2016, was condemned for his complicity in the embezzlement of state funds.
her career as Head of the International monetary Fund (IMF), this did not diminish, however, the affair is considered to be unsightly stain on your otherwise white vest. In the IMF, you can be in the light of the Argentina crisis, a heavy heritage. Under your leadership, Argentina was $ 56 billion, the largest IMF rescue package ever granted to the country with a debt mountain of $ 100 billion but still practically insolvent.
Lagarde is expected to practice a different leadership style than Draghi
The core question is whether Lagarde at the ECB purchases in the course of her predecessor, with negative interest rates and Bonds will continue or not. Most observers expect continuity, however, new accents are to be expected. Draghi has left a deeply divided ECB governing Council, by tactical of game critics in their own ranks, such as Jens Weidmann, the President of the German Bundesbank, outmaneuvered, or to isolate even trying, and the ECB is strategically located in a one-way street led.
Lagarde is expected to practice a different leadership style than Draghi, who acted, often alone. You must therefore, because the monetary policy measures produce the effect like after the 2008 financial crisis, Draghi inflation has missed the target, always new governing activities such as the purchase of shares or helicopter money will be required, and increasingly, the call for fiscal measures of the EU countries, according to. Government stimulus programs and a softening of the debt, the debt brake, but after driving up.
Fiscal stimulus has been represented Lagarde already as IMF Chief, and on Friday, the note reaffirms that we need “complementary measures in the financial and economic policy”. Such political demands can’t implement alone. She needs allies and needs to be Convinced. It helps that the ECB Boss to make a Review of the monetary policy and the ECB want to involve the critic stronger.
skeptics fear but an increasing politicisation of the ECB, in the sense of the President of the French Republic Emmanuel Macron. The Paris targets as an EU Finance Minister, EU budget, single taxes, or the mutualisation of debt is likely to pursue a Macron over Lagarde as allies. The has far proven views. In 2008, she claimed in an Interview in the “Handelsblatt”, the establishment of a European collecting funds for banks.
Europe’s banks are still weak, the ECB’s interest rate policy is creating new bubbles and risks to financial stability, and sets the wrong incentives for new debt records. The most powerful woman in Europe will have their hands full.
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Created: 26.10.2019, 19:27 PM
