In March 2013, the French police raided an uptown Parisian apartment belonging to a key suspect in a massive political corruption case. The suspect in question was Christine Lagarde, the former economy minister under Sarkozy and now, as the managing director of the “fund of all funds”, the IMF, one of the most powerful political officials on the planet.
During their search the police stumbled upon a letter Lagarde had written to Sarkozy in which she pledged her allegiance to his government. Somehow, the content of said letter — probably written during the 2007 French Presidential campaign, when Lagarde held a relatively minor post — found its way to the editorial board of Le Monde, which didn’t hesitate to publish it. Here’s the juicy part:
I’m on your side to serve you and serve your projects for France… Use me during the time that suits you best and fits your action and your cast….If you decide to use me, I need you as guide and supporter: without guide, I might be ineffective, without support I might be implausible.
Largarde also wrote that she does not have “personal political ambitions” of her own [an absurd claim given that she now occupies one of the most powerful political positions in the world].
Judging by how events transpired after 2007, it seems safe to assume that Sarkozy was more than happy to “use” the talents Lagarde had put at his disposal. As Thomas Coutrout, co-president of ATTAC France, writes:
Lagarde strictly applied the instructions coming from the French President, especially during the 2008 financial crisis and the European debt crisis of 2010-2011…
Above all, she was totally submissive to the authority of the technocrats at the Ministry of Finance and Economy, which is composed of ultra-liberal officials who have acquiesced to the interests of the financial sector. So in 2010, France refused to support Germany on the question of the prohibition of naked short selling…
“Just How High, Boss?”
Put simply, when Sarkozy said “jump”, Lagarde said “How high?” And boy, could she jump! Even when Largarde received orders from the French Presidency to reward the support of long-standing Sarkozy friend and ally Bernard Tapie by using a private arbitration tribunal instead of the ordinary court that was about to reject Tapie’s enormous claims, she did not hesitate to move into action.
The fact that Tapie had a long history of dubious business activity seemingly mattered little to either her or Sarkozy. That Tapie had already served a six-month (reduced from two-year) prison sentence in 1995 on charges of match fixing and financial irregularities while president of Olympique de Marseille football club, not to mention complicity in corruption and subornation of witnesses, was mere water under the bridge.
Predictably, the private arbitration panel found in Tapie’s favour, awarding him an unexpected €403 million premium from the French Treasury – all of it backstopped by French taxpayers.
According to Stephane Richard, the CEO of France Telecom and a former aide to Lagarde when she was Finance Minister, who has himself been put under formal investigation in the case, Lagarde was fully briefed before approving the arbitration process. Yet despite what seems like water-tight evidence implicating her in the Tapie scandal, Lagarde has been assigned the status of “assisted witness”. In other words, she is not herself under investigation in the affair.
There is an obvious reason for this: now, as Managing Director of the IMF, Lagarde is quite simply above the law of her native France, and just about anywhere else — provided, that is, she keeps her nose clean and her new bosses happy. Which was more than could be said for her predecessor, the raging sex addict Dominique Strauss Kahn who got himself caught in a honey trap while allegedly ruminating on the madcap idea of making banks share some of the burden of public bailouts.
Judging by her performance to date, Lagarde’s “superiors” must be delighted with their choice of replacement for the ill-fated DSK. Unlike DSK, she has not, and in all likelihood never will, use the word “greedy” to describe the world’s biggest banks; nor is she ever likely to say, as DSK did on the documentary Inside Job, that “the poorest – as always – pay the most.”
You see, Lagarde, unlike DSK, appears to have a clear grasp of what her role at the helm of the IMF entails. Rather than eulogising the poor and weak and criticising the banks, the IMF MD’s job is to laud the banks and shield them from all consequences of their reckless actions, while of course browbeating the poor and weak.
Suffer the Mothers?
Just a few months into her job, Lagarde more or less admitted in an interview with the UK Guardian that she couldn’t care less about the suffering of mothers in Greece and other crisis-stricken countries. Labelling the Greeks “tax dodgers” (a certain amount of truth in that), she claimed that she was much more concerned about the fate of starving children in Niger – a bizarre choice of country given the damage IMF loans have done to its economy over the last 30 years.
Two years later, in time-honoured IMF fashion, Lagarde backtracked on Greece, admitting that the troika had erred in its initial calculations and that this had led to the wrong economic solutions being applied to the country’s crisis. She claimed, nevertheless, that they had “made sure there was enough of a safety net so that people who were most exposed would not suffer too much.”
However, as Alex Andreou noted in The Guardian, for someone who no doubt flies first class and is shuttled by limousine between five-star hotels and clean, white marble conference buildings, reality may be easy to miss:
Such a visitor is unlikely to see the old women clad in black dresses and scarves, who appear like an ancient Greek chorus as soon as supermarkets have rolled down their shutters, in order to search through the bins for scraps in the evening gloom. Or the thousands queueing up every day for care packages from Médecins du Monde, or the addicts shooting up in the streets, or the body bags of families being wheeled out of flats, suffocated as they burned rubbish in their stove to keep warm.
Similar, though not quite so bleak, conditions are now a commonplace throughout the Troika-saved nations of Southern Europe. Never one to learn from its mistakes, the IMF, with Largarde leading the charge, is now poised to impose on Ukraine the exact same structural conditions it has so disastrously imposed on Greece. The austerity plan will slash pensions, cut social services and funds for education and health, layoff government workers and open Ukrainian assets to Western corporations.
In short order what little remains of Ukraine’s national wealth, including its mineral-rich soil, will be siphoned and auctioned off for cents on the euro to the IMF’s real clients. By then, the country’s hapless citizens will have realised what many Africans, Asians, Latin Americans and Eastern Europeans learnt through bitter painful experience in the seventies, eighties and nineties: namely that when the IMF, armed with its balance sheets and a calculator, comes calling, you’d better hope you’re out — even more so today, now that the world’s biggest financial players have found in Christine “Use Me” Lagarde the exemplary servant.