Christine Lagarde’s appearance in her first press briefing as the new IMF head created reasonably high expectations about the new promising prospects she opens for the requisite restoration of the organization’s image. The unprecedented arrest of Dominique Strauss Kahn deprived IMF’s staff of his beneficial ability to lead the Fund coherently and collectively. This fact also had a very negative impact mostly on the full and uninterrupted operation of the organization in a literally crucial period of time, when the managing of the eurozone’s crisis was needing the IMF’s determinant role in pressing the undecided and confused European leaders to take faster and more solid decisions.
Undoubtedly DSK’s stepping down left behind a lack of leadership for the IMF and a lack of vision for the eurozone’s crisis solution. But, fortunately, this uncertainty belongs to the recent past since Christine Lagarde not only knows adequately the parameters of the european financial crisis, but she also seems to prioritize the launching of a new model for the IMF’s administration and operation.
This last point is something extremely important for a living organization such as the IMF, which is characterized by the national and cultural diversity of its personnel, and by the indispensable obligation to prove incessantly its credibility, impartiality as well as its internal and external legitimacy. What was delineated by Mrs Lagarde in her first announcement to the journalists was exactly a new political platform where the IMF does not only make reliable judgements over countries’ economies, but also gives comprehensible and justifiable answers whenever needed, through adopting an even more effective and externally oriented way to diffuse its messages.
Comprehensiveness as an essential element of the IMF’s new administration policy is also fundamental for its legitimacy. In the new era, the Fund has to be transformed to a more explanatory organization making clear to people why its suggested policies are required for a country to confront or — even better — prevent a crisis in the future. Moreover, Mrs Lagarde’s vision actually gives a lot of reasons to believe that under her term the IMF will be swift to focus on closing the inside gap between the advanced and developing economies even more, coalescing the different perspectives into a unified and representative policy in favor of making all the countries’ voices heard, and repairing the global economic imbalances.
In addition, Christine Lagarde’s European orientation constitutes a guarantee for continuing the Fund’s policy, designed by DSK, towards its active involvement into the European efforts in finding a solution to the eurozone’s financial crisis. As her predecessor, the new managing director has a deeply internal knowledge of this crisis as well as of the weaknesses of the European leaders to coordinate themselves and to get expressed by one single voice. The permanence of a European political figure at the IMF’s top is what was expected by the markets, which perceive the upgraded role of the Fund in this crisis as a factor for counterbalancing the inadequacy of Europeans to act and react faster and more effectively to the crisis’ alarms. Mrs Lagarde’s statement that the Greek problem’s solution is one of her first priorities is a significant commitment. Since she definitely adopts the point of view which holds that a Greek default will prove contagious to the global economy as a whole, the IMF is not expected to surrender this struggle of articulating a sustainable and vigorous response to the current debt crisis in cooperation with its European partners.
However, the IMF under Lagarde’s administration is now expected not only to impose the fiscal adjustment policy considered necessary in countries such as Greece for controlling the deficits and overcoming the debt crisis but also has to make this policy understandable, self-explanatory and familiar to the people. Of course the Fund is not a political organization or a social movement to be beloved by voters. As an institution, though, whose policies have a huge impact on people’s life, it must try constantly to persuade these people for the legitimacy of its policies. And this is the real and challenging bet that the new managing director should defeat by gradually transforming the Fund into an even more open, approachable and accountable organization in the eyes of the society. And if the question is “can she succeed in doing this?,” the answer cannot be anything else than “of course, she can.”
Originally posted on huffingtonpost.com