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POLITICS

Christine Lagarde: France’s ‘rock star’ finance minister

Silver-haired and silver-tongued, Christine Lagarde has cut an impressive figure as the first female finance minister of a G7 power, earning a reputation for grace under fire during the global economic crisis.

If Lagarde succeeds in her bid to be managing director of the International Monetary Fund, she would be the first woman to head the global emergency lender.

The IMF’s former chief economist Kenneth Rogoff told the New York Times Lagarde was so popular at finance meetings that she was “treated practically like a rock star.”

A lawyer by training, the 55-year-old Paris native became France’s longest serving finance minister earlier this month, having held the position since 2007.

Fluent in English, Lagarde emerged as a leading figure in Europe’s response to the 2008 financial crisis as the then-head of the eurozone finance ministers.

With France currently in charge of the G20 group of the world’s largest economies, she has been the pointwoman on efforts to combat the effects of the crisis and reform the global financial system.

Complimented by some for her smooth handling of the monumental crisis and criticised by others for stubborness, Lagarde has become a fixture on the world stage, with close relations to her counterparts in most of the major capitals, from Beijing to Brasilia.

Although she studied law and political science, after being admitted to the Paris bar, she joined the international corporate law firm Baker & McKenzie, specialising in labour and anti-trust issues as well as takeovers.

She rose to become chairwoman of the Chicago-based firm’s global executive committee in 1999 and then of its global strategy committee in 2004.  

Lagarde returned to France in June 2005, joining the government as trade minister under president Jacques Chirac.

Nicolas Sarkozy named her agriculture minister upon taking office as president in 2007, and then in an unexpected reshuffle appointed her finance minister.

Lagarde imposed herself as a linchpin of his presidency, giving the ministry a stability it had not seen since the 1990s. Before her, seven ministers had held the office in seven years.

Mistakes, when they happened, were usually not in the realm of finance but trampling on French political sensitivities.

Lagarde landed in hot water after labeling French labour laws “complicated, too heavy” and responsible for freezing job growth.

She also trod on political toes by using “rigueur”, a hot-button French word for austerity, to describe a key Sarkozy policy of slimming the bloated bureaucracy by not replacing retiring civil servants.

And when France faced high petrol prices, Lagarde said the French should ride bikes, doing nothing to erase her reputation in some circles as out-of-touch.

But she held on to her job, and became even more valuable to Sarkozy. Only recent accusations of conflict of interest have clouded her political horizons.

In May a prosecutor called for a probe into her handling of a high-profile dispute that resulted in a 240-million-euro ($345-million) government payout to flamboyant tycoon Bernard Tapie.

But the French court has put off until July 8 – after the IMF is expected to choose a leader –deciding on whether to allow a probe.

Questions have also been raised about an investment by Lagarde in a start-up run by the son of a state-run agency boss she appointed.

But in both cases Lagarde has shrugged off the accusations, calling the Tapie allegations a “smear” and the start-up investment a contribution to help restart the French economy.

STRIKES

French protest pension reform again as unions threaten to step up action

Protesters once again took to the streets in towns and cities across France on Tuesday to call for the government to scrap its proposed pension reform as fresh strikes brought widespread disruption on transport.

French protest pension reform again as unions threaten to step up action

The third day of union-backed demonstrations since January 19th was set to test momentum for the protest movement which has vowed to block Macron’s bid to raise the retirement age.

The head of the hardline CGT union, Philippe Martinez, warned that more “numerous, massive and rolling” strikes were coming if the government did not drop the plan.

“If the government keeps on refusing to listen then of course things will have to be ratcheted up,” he said, as the demonstration in Paris got underway.

French leftist party La France Insoumise (LFI) leader Jean-Luc Melenchon (C) addresses media ahead of the start of the demonstrations on the third day of nationwide rallies against a deeply unpopular pensions overhaul at Gare de Lyon train station in Paris on February 7, 2023. (Photo by Sameer Al-Doumy / AFP)

Macron put raising the retirement age and encouraging the French to work more at the heart of his re-election campaign last year, but polls estimate that two-thirds of people are against the changes.

Lawmakers began debating the reform, which would see the age for a full pension raised from 62 to 64 and the mandatory number of years of work extended for a full pension, during a stormy session in parliament on Monday.

Mobilisations across the country

Last week’s demonstrations brought out 1.3 million people across the country while a first round on January 19 drew 1.1 million protesters, according to the police.

A security source told AFP that between 900,000 and 1.1 million people were expected on Tuesday.

French 24-hour news channel BFMTV reported that more than 200 rallies against the pension reform had been organised across the country on Tuesday.

Protesters gather at Place de l’Opera prior to the start of the demonstration (Photo by Sameer Al-Doumy / AFP)

The crowds so far have been the largest anti-government protests since 2010, during pension reform by right-wing former president Nicolas Sarkozy.

There were tensions in the western city of Nantes where protesters clashed with security forces who used tear gas pellets, an AFP photographer said.

Protesters in Nantes in western France shrouded in teargas face off with law enforcement during a demonstration on the third day of nationwide rallies against pension reform (Photo by LOIC VENANCE / AFP)

In Paris, French daily Le Parisien reported that within an hour of the march beginning, more than 2,200 people had already been subject to police checks.

Hard-left leader Jean-Luc Melenchon said Macron had to take account of the mobilisation on the streets.

“Unless he has become completely authoritarian, you need to be reasonable in a democracy,” he said, accusing Macron of trying to start his five-year term with a “show of force”.

The impacts of strike action 

Trains and the Paris metro again faced “severe disruptions”, while cancellations at Orly airport south of the capital were expected to total one in five.

The overall level of disruption, including in schools, was estimated to be lower than on the previous two days of action.

According to Franceinfo, 25 percent of French national rail workers walked out on Tuesday, in contrast to 36 percent during the previous day of action on January 31st. As for teachers, the French ministry of education estimated to Franceinfo that about 14.17 teachers were out on strike, compared to 25.92 percent on January 31st (based on parts of the country not currently on holiday). 

Nevertheless, around half of long-distance trains were running, the state railway company said.

Railway workers hold a banner as they protest against pension reform a general assembly of railway workers on the third day of nationwide rallies organised since the start of the year, against a deeply unpopul at Gare de Lyon train station in Paris on February 7, 2023. (Photo by Sameer Al-Doumy / AFP)

Another day of action is planned by unions on Saturday although with train unions calling for protests rather than strikes, disruption may be less severe. 

“It’s ok, it’s manageable,” Sylvain Magnan, a 23-year-old told AFP at the main station in the city of Marseille on the Mediterranean. “I just took a later train.”

Two unions representing rail workers, the CGT and Sud-Rail had also threatened renewable strike action from mid-February onwards. 

“I don’t feel that the guys are ready to go on a renewable strike at the moment”, train driver and member of the CGT chapter representing rail workers, CGT-Cheminots, Thierry Milbeo, told Le Parisien, referencing his fellow rail workers.

As for oil refineries, approximately one in two TotalEnergies workers were out on strike during the third round of walkouts, the company said, but stocks at petrol stations are sufficiently high to handle any temporary pause in deliveries.

The situation in French parliament

Macron’s proposals would bring France closer into line with its European neighbours, most of which have retirement ages of 65 or higher.

But the government has struggled to defend the overhaul as necessary or fair, given that the system is currently in balance and that low-skilled workers are said by many economists to bear the brunt of the changes.

“It’s reform or bankruptcy,” Public Accounts Minister Gabriel Attal said in parliament on Monday, leading to criticism from opponents that he was exaggerating.

French Junior Minister for Public Accounts Gabriel Attal delivers a speech during the debate regarding the draft law on pension system reform at the National Assembly in Paris, on February 6, 2023. (Photo by Ludovic MARIN / AFP)

Forecasts from the independent Pensions Advisory Council show the pensions system in deficit on average over the next 25 years.

The changes would lead to annual savings of around €18 billion by 2030 — mostly from pushing people to work for longer and abolishing some special retirement schemes.

France’s spending on pensions is the third highest among industrialised countries relative to the size of its economy. The country is number one in terms of overall public spending, according to data from the Organisation for Economic Co-operation and Development.

In parliament, the government will need to rely on the right-wing Republicans opposition party to pass the draft legislation, without having to resort to controversial executive powers that dispense with the need for a vote.

Macron’s allies are in a minority in the hung National Assembly after elections in June.

Prime Minister Elisabeth Borne on Sunday offered a key concession, saying people who started work aged 20 or 21 would be allowed to leave work a year earlier.

Republicans’ head Eric Ciotti has promised his backing, in theory giving the government the numbers it needs to pass the legislation.

But the left-wing opposition group and the far-right nationalist and Eurosceptic party of Marine Le Pen are staunchly opposed and have filed thousands of amendments.

Speaking in parliament on Monday, Le Pen said the government’s reform was “unfair” and “dictated by your desire to please the European Commission.”

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