Lagarde, speaking before leaving for this week’s G20 summit in South Korea, said France’s presidency, which begins after the summit, would strive to make the G20 more effective and representative, perhaps via a permanent secretariat for the organization.
“Currently, the (international monetary) system is not working in a satisfactory way,” she told a news conference. Asked whether she shared criticism voiced by German Finance Minister Wolfgang Schaeuble of the Federal Reserve’s latest round of monetary easing, Lagarde said: “In monetary policy, I favor concerted and coordinated actions, (which is) a condition for their effectiveness and their tolerability.”
“It is in this spirit that France’s G20 presidency will open: we must find platforms for cooperation; we must find platforms for convergence both of our economic and monetary policies.”
The minister said that swings in the euro, which had appreciated by around 4 percent in recent weeks, were a source of concern for French exporters but that an economic recovery nonetheless remained on track.
“Growth has restarted in France in a very robust way,” she said, noting that the economy had notched up five straight quarters of expansion and consumer spending had remained positive throughout the crisis.
“We are now in a period of stabilization of unemployment ... The main objective of our economic policy is to maintain and develop jobs.”
Lagarde said she expected the Seoul summit, which starts on Thursday, to rubber stamp progress made in international financial regulation since the economic crisis, principally the Basel III capital requirements published in September.
French President Nicolas Sarkozy has set an ambitious agenda for France’s turn at the G20 helm focused on three areas: reforming the international monetary system, combating volatility in commodities markets, and improving global governance.
Lagarde said the G20 had proved its usefulness in combating the global economic crisis, but now required reform to transform it into a long-term tool of global economic governance.
“Can we not under the French presidency imagine, organize and implement mechanisms which would allow better representation for everyone, allow legitimacy and effectiveness, perhaps with the creation of a secretariat?” she said.
She said in that vein some form of permanent link was needed between international organizations such as the World Trade Organization and the International Monetary Fund.
