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Lagarde takes over at IMF, dodges questions about funding for Greece

Christine Lagarde, new managing director of the International Monetary Fund, is preparing for a board meeting tomorrow to consider further funding for financially struggling Greece. Christine Lagarde, new managing director of the International Monetary Fund, is preparing for a board meeting tomorrow to consider further funding for financially struggling Greece. (Andrew Harrer/Bloomberg News)
By Binyamin Appelbaum
New York Times / July 7, 2011

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WASHINGTON - Christine Lagarde, victorious in her campaign to lead the International Monetary Fund, said yesterday that meetings had consumed 18 of her first 24 hours on the job, with no respite in sight.

Lagarde, formerly the French finance minister, faces the challenge of lifting the morale of bruised employees even as the fund confronts one of its greatest tests, preserving the financial stability of Europe.

On Tuesday, she held a meeting at the fund’s headquarters in Washington to introduce herself to the staff, which is still shaken by the abrupt resignation of her predecessor, Dominique Strauss-Kahn, after he was charged with the sexual assault of a hotel maid. Tomorrow, she holds her first board meeting to consider another round of emergency funding for Greece.

“I thought it was necessary to come back to D.C. very promptly simply because there are so many issues to address,’’ Lagarde said by way of introduction to her first official news conference. “It cannot wait for another summer holiday. Here I am, and for good.’’

When Lagarde last met with reporters at the fund’s headquarters, during the organization’s annual spring meetings, she appeared as a representative of France and made a point of speaking mostly in French. Yesterday, settling into her new role as an international official, she spoke exclusively in English, even when addressed in French.

She mostly dodged questions about Greece, saying that she would not prefigure tomorrow’s meeting, but she did provide a measure of her thinking on the fund’s mission and priorities.

Strauss-Kahn, a member of the Socialist Party in France who expanded the fund’s traditional focus on financial stability to include broader goals such as reduced unemployment, argued that the benefits of prosperity did not necessarily flow to the broader populace, and that the fund needed to measure its success in terms of that broader impact.

Lagarde is a political conservative. She said yesterday that people should judge her tenure by her actions rather than making assumptions based on political labels. She said that she needed time to study the fund’s policies before offering her own opinions.

But she sounded a note of caution about those policies at the outset.

“We should not become a specialized boutique to reduce unemployment,’’ she said, although she added that she did support elements of the fund’s current comprehensive approach.

“Some of the things that Dominique Strauss-Kahn has started are excellent reforms,’’ she said, including the “comprehensiveness that we should adopt embracing the unemployment and social issues as well as the economic trends that are more traditional.’’

Much of the news conference was devoted to questions about the fund itself. Strauss-Kahn was allowed to remain atop the fund after the disclosure of an affair in 2008 with a subordinate.

A number of women have come forward in recent months to describe the fund as a problematic workplace, where superiors often felt free to press subordinates for dates and little effort was made to prevent or to punish sexual harassment.

Lagarde campaigned to replace Strauss-Kahn largely on the strength of Europe’s determination to maintain leadership of the fund, particularly at a time when its primary challenge is to help the governments of Europe.

The fund was created by the United States and its allies after World War II as a lender of last resort for troubled governments. Since that time it has always been run by a European, although the United States maintains effective control.

Lagarde has said on several occasions, however, that a female executive would be an advantage for the fund, reducing what she described as the level of testosterone.

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