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EU leaders choose France's Lagarde for ECB after marathon summit

  • Gabriela Baczynska, Robin Emmott, and Francesco Guarascio

    Reuters

Brussels, Belgium/ Strasbourg, France   /   Wed, July 3, 2019   /   08:28 am
EU leaders choose France's Lagarde for ECB after marathon summit International Monetary Fund (IMF) managing director Christine Lagarde smiles during a press briefing on the sidelines of the 2017 IMF-World Bank Annual Meetings in Washington DC, United States, on Thursday. (IMF/International Monetary Fund)

European Union leaders agreed on Tuesday to name France’s Christine Lagarde as the new head of the European Central Bank and sealed a deal on filling the EU’s other top four jobs after marathon talks that have exposed deep divisions in the bloc.

Three days of summit negotiations that at times looked close to collapse ended with a deal that now must be approved by the European Parliament and was immediately rejected by the socialist and green bloc in the assembly in Strasbourg. 

“Done!” said Luxembourg’s Prime Minister Xavier Bettel, who was first to break the news on Twitter that leaders had finally clinched a deal.

Leaders hope the decision to nominate two women, Lagarde and German Defence Minister Ursula von der Leyen, to the top of EU decision-making for the first time will send a positive message and repair damage wrought by such a fractious summit, diplomats said. 

The discord echoed a wider fracturing of the EU’s political center that was evident in May’s European Parliament elections that delivered a more fragmented assembly in which no bloc won a majority and far-right and far-left groups performed strongly. 

Under the deal, von der Leyen, a close ally of German Chancellor Angela Merkel, will replace Jean-Claude Juncker as president of the European Commission, the EU’s executive arm.

“After all, Europe is a woman,” Donald Tusk, the outgoing chair of EU summits, told reporters, referring to the ancient Greek mythical figure of Europa who gave her name to the continent. 

Lagarde, once France’s first woman finance minister and since 2011 head of the International Monetary Fund (IMF), is a strong advocate of female empowerment, although she has no direct, active monetary policy experience. 

The biggest task for Lagarde, who had previously denied any interest in an EU job, will be to revive the euro zone economy. 

“Christine Lagarde will ... be a perfect president of the European Central Bank,” Tusk said. “I am absolutely sure that she will be a very independent president ...”

Von der Leyen, if approved, would run the powerful Commission, which supervises EU states’ budgets, acts as the bloc’s competition watchdog and conducts trade negotiations with outside countries. Her presidency would shape policy for the world’s biggest trade bloc and its 500 million people. 

She once had a reputation as a flawless politician, but Brussels-born Von der Leyen has had a scandal-prone run as German defence minister, mainly over right-wing extremism in the armed forces, gaps in military readiness, and the awarding of arms contracts.