Jul 7, 2019

The ideal ECB president

Illustration: Sarah Grillo/Axios

Christine Lagarde is moving to Frankfurt to take on the most powerful and important job in Europe — just when the European Union needs her most.

What's happening: As the new head of the European Central Bank, she won't just be in charge of setting monetary policy for 19 wildly disparate European countries; she'll also be charged with protecting the euro itself, the single most visible and controversial element of the European project.

  • The biggest crisis facing the EU is Brexit, which is due to happen on October 31. Lagarde will need more than monetary tools to keep the rest of Europe unified during that seismic event.

Background: Lagarde does not fit any of the stereotypes of a central banker. For one thing, she'll be only the second woman ever to run a major central bank. (The first, of course, was Janet Yellen.)

  • Central bankers tend to be decidedly unglamorous, as well as being male. Think gray economists in gray suits spouting gray jargon in a windowless conference room in Basel. At the highest ranks, you might find a hint of mahogany.
  • Lagarde is not an economist, but she is a politician. She first came to international prominence when she served as the French finance minister from 2007 to 2011.
  • She's also impossibly glamorous, by central bank standards. See, for instance: the 20-page Forbes slideshow dedicated to "the most fashionable woman in finance;" her appearance between Carey Mulligan and Tilda Swinton on Vanity Fair's best dressed list; a U.K. newspaper headline calling her "the world's sexiest woman."

Why she matters: Lagarde is famous and powerful entering the ECB — something that could not be said for any of the men on the shortlist. Some central bankers become famous in the course of doing their jobs, but almost none of them are well-known beforehand. (The closest example would probably be the Bank of England's Mark Carney, who toyed with running to become the leader of Canada's Liberal party, and who might yetdo so.)

  • As head of the IMF from 2011 until last Tuesday, Lagarde effectively corralled a highly disparate set of shareholders as she navigated the Greek financial crisis and helped to orchestrate the nation's bailout.
  • Amazingly, given the IMF's reputation as the last bastion of despised neoliberalism, she exits that position even more respected than she entered it.

What they're saying: Lagarde's preexisting clout will be of great utility in her new position. As Bloomberg's John Authers writes: "The euro is a political project above all, born of the anxiety of the last generation of leaders to fight in the Second World War to ensure that the continent should be bound together. And it requires a politician to hold it together."

The bottom line: With inflation below target across the continent, the monetary-policy task facing any incoming ECB president is clear. The ECB's rate-setting committee knows what it has to do. The difficulties come in the political aspect of the ECB presidency. That's where Lagarde is uniquely qualified.

Go deeper

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 3 a.m. ET: 665,164 — Total deaths: 30,852 — Total recoveries: 140,225.
  2. U.S.: Leads the world in cases. Total confirmed cases as of 3 a.m. ET: 124,665 — Total deaths: 2,191 — Total recoveries: 1,095.
  3. Federal government latest: President Trump announces new travel advisories for New York, New Jersey and Connecticut, but rules out quarantine enforcement. Per the CDC, residents of those states must now "refrain from non-essential domestic travel for 14 days," with the exception of critical infrastructure industry workers.
  4. State updates: Alaska is latest state to issue a stay-at-home order — New York is trying to nearly triple its hospital capacity in less than a month and has moved its presidential primary to June 23. Some Midwestern swing voters who backed Trump's handling of the virus less than two weeks ago are balking at his call for the U.S. to be "opened up" by Easter.
  5. World updates: In Spain, over 1,400 people were confirmed dead between Thursday to Saturday.
  6. 🚀 Space updates: OneWeb filed for bankruptcy amid the novel coronavirus pandemic.
  7. Hollywood: Tom Hanks and Rita Wilson have returned to U.S. after being treated for coronavirus.
  8. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk
  9. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Coronavirus updates: Global death toll tops 30,000

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens and confirmed plus presumptive cases from the CDC

The novel coronavirus has now killed more than 30,000 people around the world — with Italy reporting over 10,000 deaths, per Johns Hopkins data.

The big picture: The number of deaths from COVID-19 in the U.S. surpassed 2,000 on Saturday. The United States leads the world in confirmed coronavirus infections — more than 124,000 by early Sunday. The number of those recovered from the virus in the U.S. passed the 1,000-mark on Saturday evening.

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The big pig picture: President Trump has called the antiviral drug "promising," but the results of six clinical trials on this investigational medicine are still being conducted, so its effectiveness the treatment of the novel coronavirus has yet to be proved. The World Health Organization is involved in the tests.

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