Home > News from Abroad > The 14 prophecies of Christine Lagarde

The 14 prophecies of Christine Lagarde

George Osborne, you may remember, was a key cheerleader for Christine Lagarde when the IMF boss post was up for grabs.  It was his clever way of snubbing Gordon Brown.  

So did he choose wisely?

Well, Gordon did make a right balls-up when he predicted boom and bust was over.  but his crystal ball failure is nothing compared to Lagarde’s apparent failure to get anything at all right.  Nostradamus she ain’t.

[All translated from Jean-Jacques Chavigné’s blog, Democratie et Socialisme (h/t @barsacq).  Any translation errors/interpretations are my sole responsibility].

1.  17th Aug 2007, Le Parisien:

It’s not a crash….What we’re seeing is an adjustment, a financial correction – brutally certainly, but predictable.

Four months later, Northern Rock is nationalised. A year later, Lehman Brothers goes bankrupt, and recessions sweeps Europe.

2.  5th Nov 2007 on Europe 1:

The housing crisis and the financial crisis don’t seem to be having any real impact on the real US economy. There’s no reason to think that there will be any impact on the real French economy.

In October 2008, the US is hit by the housing bubble burst and the banking crisis.  Unemployment rises to 10%.  By the end of 2008, the recession has hit France and unemployment reaches 10% there too.

3.  10th Feb 2008, at G7 in Japan:

We don’t foresee a recession in Europe’s case.

By the end of 2008, recession has hit the US and Europe, and the economic crisis is being felt around the world.

4.  15th May 2008 on Europe 1:

 This morning you have on your programme a Minister for the Economy [Lagarde] who is overjoyed, to tell the truth. I’m especially happy for our country [as a result of a revision of the 2007 growth figure].  By contrast, European predictions for the deficit in France are outrageously pessimistic.

By the end of 2008, the deficit reaches 7.5% of GDP, and 7.7% by the end of 2009.

5.  16th Sept 2008, press conference:

[The crisis] will have no recognisable or calculable effect on employment or unemployment levels.

In 2009, unemployment in France goes above 10%.

6.  10th May 2010 on Europe 1:

We have decided to send an extremely strong signal to the markets to protect the euro. I’m convinced the mechanism will work.

That was when the first rescue plan for Greece was being put in place by the IMF, and before Ireland (Nov. 2010), Portugal (Spring 2011), the second bailout for Greece (end of 2010) and now Bankia in Spain.  

7.  25th June 2010:

France’s AAA credit rating is stable.  There are other AAA rating which are less stable.  I look to the other side of the Channel, for example.  France’s rating is not under threat.

In January 2012, France loses its AAA rating. The UK keeps it.

8. 8th July ’10, Aix-en-Provence:

To the question of “Are we out of crisis?’ I replied in English at the St Peterburg Forum “We are in the middle of the beginning of the end” ; and I think that about where we are.

By the end of 2001, under the Merkozy austety plan, recession is knocking on the door of all European countries once again.  By the beginning of 2012, even Germany is not being spared.

9.  9th July 2010:

I’m convinced that France will keep its AAA credit rating.

In January 2012, France loses its AAA rating.

10. 19th Dec 2010,  De Tijd:

Debt restructuring is not the order of the day within the Eurozone.

By the end of 2011, the Greek debt has been restructured.

11. 25th Jan 2011, Davos Forum:

The euro has reached an important point, and the Eurozone now has the worst behind it.

In May 2012, the Eurozone is on the edge.

12. 13th Feb ’11, to Der Spiegel:

You’re on the wrong track.  As long as I’m in this [ministerial] post, France will never lose its [AAA] status]

In January 2012, France loses its AAA rating.

13.  13th May 2011:

All the indicators are showing green.

By the end of 2011, France is in recession, and unemployment is 10%.

14.  4th June ’11, Télérama:

To protect the weak from the strong. That’s the essence of liberalism.

By May 2012, Lagarde apparently has a different view of the need to protect the weak, when asked about the impact of austerity on Greek children (Guardian interview, 25th May ’11):

Well, hey, parents are responsible, right? So parents have to pay their tax.



Categories: News from Abroad
  1. June 1, 2012 at 7:56 pm


    “In October 2008, the US is hit by the housing bubble burst and the banking crisis. Unemployment rises to 10%. By the end of 2008, the recession has hit France and unemployment reaches 10% there too.”

    Housing prices peaked in 2006. The recession was linked more directly to financial stress from mid- 2007 onwards. You can either conventionally blame the subsequent financial crisis and the collapse of securities markets in 07/08 or central bank incompetence. The housing bust was neither necessary nor sufficient for this depression.

    Other than that, good post. We are run by the most incompetent elite of all time. I genuinely wish Napoleon, Bismark and Disraeli were sorting this out.

    • paulinlancs
      June 1, 2012 at 8:19 pm

      Thanks. Tbh I was just mindless translating. You are correct though.

  2. Agog
    June 2, 2012 at 4:11 pm

    Of course no forward-looking statement from someone like Ms Lagarde ought to be taken at face value, because there are certain things that cannot be admitted, because of the constraints consequent to her political goals.

    Not quite on topic, but Owen Paine has a nice post here touching on long term motivations to keep debt/GDP ratios low: it helps to keep monetary policy dominant over fiscal. Mr Paine is sometimes not easy to parse, but is very astute ISTM!

  1. June 14, 2012 at 9:49 am

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