Saturday, March 10, 2012

Lagarde/Merkel differ on solutions for European crisis....we lean toward Lagarde

UPDATE: See March 27th blog...Merkel agrees to Permanent Rescue Fund
By Nicholas Kulish and Annie Lowrey, New York Times, March 9, 2012
The International Monetary Fund’s managing director, Christine Lagarde, who is French, finds herself on a collision course with Chancellor Angela Merkel of Germany, posing a test for the unusually close relationship between the two leaders. They have opposing stances on how much money is needed to protect vulnerable economies, and how it should be raised.

Ms. Lagarde says Europe needs at least $1 trillion in emergency funds and is pressing for a much more robust European contribution before the I.M.F. commits to raising more money from its members. She has worked hard to drag along Ms. Merkel, who is hamstrung by a domestic constituency sharply opposed to committing more money to rescue neighbors.
In spite of the sometimes tough negotiations, colleagues and confidants describe a warmth and chemistry between the two leaders that transcends policy differences. They are on a first-name basis. They frequently exchange text messages. Shortly after Christmas, Ms. Lagarde brought Ms. Merkel a trinket from Hermès and received a recording of the Berlin Philharmonic playing Beethoven from Ms. Merkel, a classical music lover.
“There are many circles and many forums where it’s only the two of us who are women,” Ms. Lagarde said in an interview. “So there’s a sense of recognition, complicity, solidarity.”
Yet for all that personal solidarity, the two leaders have come to represent competing philosophies for solving the debt crisis that has punished European economies and threatened the financial stability of the rest of the world.
Their opposing worldviews may well come from formative experiences. As a high school student, Ms. Merkel traveled from East Germany to Moscow to take part in a Russian language competition; Ms. Lagarde attended a prominent girl’s school in suburban Washington, complete with an internship on Capitol Hill.
Ms. Lagarde, nicknamed l’Américaine in her native France, has been vocal in support of pro-growth policies on the part of the richer European countries to help their more indebted neighbors. She has pressed Europe to make its firewalls — the pools of money available to keep borrowing rates at sustainable levels — so enormous that they scare off would-be speculators.
Since becoming the head of the I.M.F., and in stark contrast to her public statements in her prior job, as French finance minister, she has repeatedly castigated Europe for doing too little, too late, and lacking focus on spurring higher growth rates.
Ms. Merkel, who declined to be interviewed for this article, has argued that free-spending governments got many European countries into trouble in the first place, and that the path to stability runs through austerity. Large firewalls, in this view, only give countries like Greece a false sense of security and an excuse to ease up on the painful measures demanded of them. Ms. Merkel has demanded assurances that all European countries bring their finances under strict control before the governments of the European Union agree to free up resources to help.
Their differences were brought into sharp relief in January when Ms. Lagarde gave a speech at the German Council on Foreign Relations in Berlin in which she demanded that Germany step up its efforts to save the world from “a 1930s moment.” Switching from her fluent English to halting, phonetic German, she concluded with a line by the German poet Goethe. “It is not enough to know, we must apply,” Ms. Lagarde told the audience. “It is not enough to will, we must do.”
The speech made headlines around the world, evidence of a backroom dispute breaking out into the open. Yet Ms. Lagarde had arrived in Berlin on the eve of her address with a copy of the speech, for Ms. Merkel to read, before Ms. Lagarde delivered it in front of the political and foreign-policy establishment. The two women debated the crisis in private over a dinner of veal tenderloin in the modern Chancellery’s eighth-floor dining room.
There is the fact that Ms Merkel has to answer to a parliament and, through elections, to the people of Germany, Ms Lagarde responds to the governors of the IMF, and is not subject to elections, only a potential renewal (or not) of her appointment that underscores part of the difference. However, one of the most serious "framing" issues for this story is to equate Ms Lagarde's position to the American view. That would emasculate her view before it developed wings.
Let's try something different.
We (here at the have, and will continue, to frame many of the global issues like the environment and the economy and poverty and disease and even terrorism in "world community" terms. While we must rely on nation states to raise the money, and to conduct much of the research, we have to develop "global" perspectives on all of the current most pressing issues. And that will mean a shaving of the importance and the political weight of individual nations, in the final decisions. Collaboration, co-operation and collegiality among all of the world's nations will have to become the norm, and not continue as the exception, if we are to engage all peoples of the world in facing and in solving the worlds collective problems.
That perspective does not have to mean that the world becomes "nanny state" for the struggling nations; they will still have to shoulder legitimate responsibilities. However, it does mean that while paying their own bills, the richer nations will have to "share" more of their expertise, and their intelligence and their bounty, in all of its forms, with the rest of the world.
And Ms Lagarde is one of the voices on the world stage for such a perspective. Her platform, and her bully pulpit supercede that of her national leaders, at least in economic terms. Her perspective is one that needs fostering, encouragement and nurture among world leaders, both publicly and privately. Perhaps because the global economy is so fragile, and the U.N. has become so seemingly impotent on so many fronts, Ms Lagarde's voice is even stronger and more clear and carries more political heft than the Secretary General of the UN, Ban Ki Moon.
So while we respect the perspective of Ms Merkel, in her more conservative views on solving the world's, and especially Europe's economic crisis, we defer to the views of Ms Lagarde, for the simple reason that her perspective will help lead the world community to more collaborative and more collegial and hopefully more effective and long-term solutions.
We all need more voices singing in the same choir as Ms Lagarde, without the constraints of elected political office in any country, if we are to begin to incubate global perspectives on all the issues seeking global attention.
There is a phrase that is often used in hockey jargon that might apply: "We win as a team and we lose as a team, so the apparent mistake(s) of one of our members is not the reason for a loss."
Perhaps, once again, a Canadian (hockey) aphorism might be useful in carrying the Lagarde perspective forward, not to supercede the individual national leaders' point of view, but to gain credence and traction in the search for effective solutions to the many files needing all "hands on deck" in order to wrestle them into something manageable.
We do, after all, breathe the same air, drink the same water, grow food on the same earth and catch the same viruses (increasingly and more rapidly than ever!) and we are all increasingly inter-dependent. And what happens in one corner of the earth is not only instantly known everywhere else, it is also potentially an issue every where else, because it does affect us all, just as the quantum physics researchers demonstrated in their research.
We have to shed our parochialisms, our provincialisms, our fears and bigotries and, put on new "wine skins" to carry the new wine, as some sacred book reminds us. And that means that we have to grow our individual respect for "the other" no matter which part of "the other" is offensive to us...including the dress, the faith rules, the languages and the cultures.
We humans are part of a rather "magnificent mosaic" of colours, accents, perspectives and talents...and the sooner we grow to appreciate the magnificence of that mosaic, the sooner we will enter into its richness without the fears of "the other" that we have inherited from our ancestors, along with many blessings.

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