Christine Lagarde, First Woman to Head the ECB, Faces Peril on All Sides
Mario Draghi’s successor is going to need all her political and technocratic skills to maneuver European monetary policy toward growth, in spite of bureaucracy, nationalism, populism, and just plain parsimony.
Christine Lagarde will inherit two gifts when she takes over the presidency of the European Central Bank, both temporary and both from Mario Draghi. The first is a symbol that will be literally handed to her by the outgoing ECB president: a golden bell used to call the central bank’s policymakers to order. It’s an object that she will ceremonially pass on to her own successor in eight years. The second gift is a fresh round of monetary stimulus, pushed through by Draghi in his final weeks, that should put off the next decision to raise interest rates—always politically fraught—until at least 2022.
That may sound like the promise of a smooth transition, but it’s not. Already, Lagarde’s leadership skills are being tested by two other things Draghi’s leaving behind: rifts among ECB policymakers brought on by unhappiness over his final round of pump priming; and their mounting concern that the central bank’s efforts to revive the euro zone economy are being undermined by stingy national governments.