Help Europe, Help Thyself

International Monetary Fund Managing Director Christine Lagarde warned in a November 9 speech in Beijing that the global economy risks "a lost decade of low growth and high unemployment" unless countries work together to resolve debt crises.

And China's monetary policymakers, she said, have a key role to play.
"When inflation pressures are high and monetary policy is accommodative, monetary tightening makes sense," she said at the 2011 International Finance Forum. "But when inflation is under control and exposure to external dangers is high, countries can hold off on monetary tightening."
Lagarde is an attorney who served in several French government posts before being named the first woman to head the IMF in July.
Lagarde pushed for financial regulatory reform in France during the 2008 global financial crisis. She also called for raising core capital adequacy ratios at systematically important banks to 9 percent, at a time when other French and German leaders sought to delay stricter requirements.
In an interview, Caixin asked Lagarde to comment specifically on Europe's current debt woes, IMF's role in fixing them, and what China can do to help. When asked about her economic philosophy, Lagarde described herself as "with Adam Smith – that is, liberal."
Excerpts from her remarks follow.