IMF-Germany Spat

Meet Angela Merkel’s Next Victim

Merkel-Lagarde-Reuters
My way or the highway. Angela Merkel and Christine Lagarde.
  • Why it matters

    Why it matters

    International Monetary Fund Chief Christine Lagarde may fail to win a second term next year because of growing criticism of her handling of the Greek debt crisis.

  • Facts

    Facts

    • Ms. Lagarde wants E.U. lenders to agree to a debt cut for Greece, which Chancellor Angela Merkel strictly opposes.
    • Ms. Merkel has instead offered debt relief in the form of lower interest rates and longer maturities.
    • Ms. Lagarde is under fire within the IMF over her handling of the Greek crisis, and her re-appointment in 2016 is in doubt.
  • Audio

    Audio

  • Pdf

Christine Lagarde, 59, the managing director of the International Monetary Fund, likes to tell journalists an anecdote about how on the morning of her 57th birthday, there was a knock on the door of her hotel room in Mauritius. When she opened it, she was handed a beautiful bouquet of flowers with a handwritten note from “my friend Wolfgang Schäuble.”

What’s remarkable about that story is that Ms. Lagarde, as so often, referred to the German finance minister as her “friend.” That’s not a term she uses quite so liberally when she refers to Mr. Schäuble’s boss, Chancellor Angela Merkel.

The two women have been battling the euro debt crisis together for years, but Ms. Lagarde has never really trusted the German leader, arguably the only woman in the world more powerful than she.

She may well be right not to. Recent weeks, during which Ms. Merkel browbeat her conservative party into supporting a third bailout for Greece, provided yet another example of how “Ms. Merkel abuses the IMF for her own purposes,” as center-left German newspaper Süddeutsche Zeitung put it.

Ms. Merkel’s approach has had unfortunate consequences for Ms. Lagarde, whose involvement in the Greek drama has damaged her standing within the fund so badly that few expect her to clinch a second term in next year’s election.

“There’s a long list of men whose careers Ms. Merkel has ruined,” said one Berlin insider, adding that “Christine Lagarde could become the most important woman” to suffer the same fate.

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