Even France's most committed capitalists have long turned their noses up at the "Anglo-Saxon" model of economic development, which many French say stresses corporate profits at the expense of jobs and community. So how to explain Christine Lagarde, the new Finance Minister in Paris? A longtime partner at a Chicago-based law firm, she's the most unabashed market advocate ever put in charge of French economic policy. And her background as a transatlantic legal star and trade negotiator could prove crucial in helping President Nicolas Sarkozy carry out his ambitious reform program.
Since the early 1970s, Lagarde has shuttled between France and the U.S. She honed her flawless English as an exchange student at the exclusive Holton-Arms girls' school near Washington, D.C., and even worked briefly as a congressional intern. After finishing law school in France, she spent more than two decades practicing corporate law with Baker & McKenzie, including five years as global chairman based at the firm's U.S. headquarters. Then in 2005, Prime Minister Dominique de Villepin recruited her as France's Trade Minister.
Lagarde's regal bearing and easygoing manner stand in stark contrast to the hyperkinetic, sharp-edged Sarkozy. "Even in contentious negotiations, she always kept her cool," says Denise Broussal, a partner in the Paris office of Baker & McKenzie who has known Lagarde for more than a decade. That calm, methodical style could help Sarkozy with two big challenges: trimming public spending and unraveling the tangle of rules that hinder business in France. Lagarde likely will move swiftly to downsize the Finance Ministry--the biggest government bureaucracy, with more than 175,000 employees--while using her budgetary powers to curb spending and regulation across the sprawling government. "She understands the idea of efficiency as few French people do, and having worked outside France, she thinks differently about the role of the state," says Marc Touati, who heads the ACDE economic consultancy in Paris.
Source: Business Week, http://www.businessweek.com