Global Politics

IMF chief Christine Lagarde is a powerful force on the global stage

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Credit: Paul Hackett/Reuters

IMF Managing Director Christine Lagarde prepares to host a news conference at the Treasury, in London June 6, 2014. IMF Managing Director Christine Lagarde ruled herself out of the running for the job of European Commission president on Friday.

Right now, the worst job in the world might just be president of the European Commission. A new president must be chosen "in the light of" the recent elections, according to the EU treaty.

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The commission is on the defensive at a difficult moment in its history. The recent European Union parliament election has established a huge voting block of what are called "euro skeptics" who are questioning the effectiveness of the union all together. 

International Monetary Fund Chairwoman Christine Lagarde's name has been floated as a replacement for European Commission President José Manuel Barroso, though on Friday she dismissed the rumors, saying she wasn't leaving her current job. Lagarde took over the IMF while it was in the midsts of crisis and economic turmoil. That makes her a popular candidate to do the same for the suddenly tumultuous and shaky European Union system of governance.

Liz Alderman, chief European business correspondent for the International New York Times, has followed Lagarde's rise on the international stage.

"Her line is that she is not a candidate and that she has a great job," Alderman says. "The European Commission job is a very important one. Arguably, however, being the head of the International Monetary Fund is certainly more important and influential on the global financial stage."

In the last few years, Lagarde has been able to hold her own as a global financial leader.

"In terms of her role as a sort of monitor of the global economy, she has bested a lot of her critics in the last couple of years," says Alderman. "She started off in not necessarily the strongest position, having to take over from her predecessor, Dominique Strauss Kahn, who obviously had to resign amid the sex scandal."

Alderman says there are several political considerations that might impact a jump to the European Commission. 

"Her country's own president, Francois Hollande, would have to put her forward — he would be pretty reluctant to do that because that would mean that a French person would no longer be running the IMF," Alderman says.

While President Hollande might be apprehensive, the European Commission may also be hesitant, as the most recent election showed.

"Voters sort of expressed, effectively, their concern in large numbers and sort of a skepticism about Europe," Alderman says. "[Voters are wondering] what in particular are European institutions and what does the European Commission do for them?"

Alderman says Lagarde supported strict austerity measures to solve Europe's debt crisis — something that proved to be misguided.

"Once it became clear that was actually really the wrong prescription, she quickly reversed course and has since then basically set out to show that austerity hurts more than it helps," Alderman says. "She's also been very influential on the global economic stage by warning about the dangers of low inflation in Europe, for example, and urging the European Central Bank to do more. That's another reason why she would be seen as a credible candidate for the European Commission. Angela Merkel reportedly is the one who even put that idea forward to President Francois Hollande. We'll see what happens from here."

This story is based on an interview that originally aired on PRI's The Takeaway, the daily news program that invites you into the American conversation.

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