By Mick Krever, CNN
IMF Managing Director Christine Lagarde told CNN’s Christiane Amanpour on Monday that things are looking up for Europe, and she expects economic growth next year.
“From having had quarters and quarters of negative growth, we are seeing progress next year,” she said. “I don’t want to use the green shoots analogy, but we’re seeing some positive news on that front.”
Many people have suggested that the IMF itself is partially responsible for the long-lasting European recession, and that it was too slow to respond to the crisis in Greece among other Southern European countries.
Yet Lagarde told Amanpour that she did not think they had dropped the ball.
“It was a question of when and how do you cut the arm,” she said, “and how do you stop contamination from possibly putting the whole system down.”
In other words, in a nose-diving plane, please put on your own oxygen mask before helping those around you.
“The choice was made to make sure the Europeans built their firewall first before anything very serious was done about the Greek debt,” Lagarde told Amanpour. “So in hindsight, yes it would have been nicer to recommend earlier. But it would have been a possible major, major exposure for the whole of the Euro Zone.”
Just as Europe struggles to recover, many are once-again raising concerns about the world’s post-crisis economy.
Last week, Sheila Bair, a former top U.S. regulator, told Amanpour that another crash could happen.
“Exactly the same thing? I’m not sure,” Lagarde said. “But we could still face major issues because the financial system is not yet fixed as it should.”
She said that world “absolutely” needed to be done on three areas: banks that are still too big to fail, increasing transparency of the derivatives market, and regulation and opening up the shadow banking system.
In the United States economists are closely watching the machinations at the Federal Reserve Bank, where a new chairman is due to be chosen by President Obama.
The role, widely considered the most powerful economic position in the world, is expected to go to Janet Yellen, currently the vice-chairman of the Bank. She is the favorite after Larry Summers a former economic adviser to the president, dropped out.
“She’s my friend,” Lagarde said of Yellen. “I’ve always supported her and I’m very pleased to see the turn of events. … I’m very sure the president will make the right decision.”
Yellen, Lagarde said, is “as good as you can get.”
If chosen by Obama and approved by congress, Yellen would be the first female chairman of the Fed.
A new report by the IMF says that women are critical to the growth of an economy.
“You can spend your money in a wise way that will help women access the job market,” Lagarde said. “Watch out how you design your tax system, because that can be an incentive for women to access the job market and contribute to the creation of growth.”
“Who at the moment is not asking for good, solid, sustainable growth?” Lagarde asked rhetorically. “No one.”
Some France-watchers say that Lagarde has political ambitions, and may want to run for the French presidency; Amanpour mentioned that she will be interviewing President Francois Hollande on Tuesday.
“I wish him the best of luck,” Lagarde said, and added nothing.
Whether she meant in the interview, with the economy, or in an election against her, was not clear.