French Finance Minister Tackles Debt, Austerity, Stimulus -- and 'Libido' in the Finance Industry

October 10, 2010— -- French Finance Minister Christine Lagarde said that "libido" marks the difference between how men and women approach business. In an exclusive interview with "This Week" anchor Christiane Amanpour, Lagarde tackled the debate between austerity and stimulus and whether the proper mechanisms are in place to prevent another near-collapse of the worldwide financial system. But she also tackled the age-old question of the difference between men and women.

Lagarde made Forbes' list of the 100 most powerful women this month, and Amanpour asked her about what women bring to an arena dominated by men.

"You were a former CEO. Do you think women have a different way of approaching business or approaching the public sphere?" Amanpour asked.

"Yes," said Lagarde, who is the only female finance minister in the Group of Seven industrialized countries. "I think we inject less libido, less testosterone ..."

"Less libido?" Amanpour asked.

"Yes. And less testosterone into the equation," Lagarde replied. "It helps in the sense that we don't necessarily project our own egos into cutting a deal, making our point across, convincing people, reducing them to, you know, a partner that has lost in the process. And it's probably over generalized what I'm saying. And I'm sure that there are women that operate exactly like men," she said.

"But, in the main, and having had nearly 30 years of professional life ... and getting closer to 60 than 50, I honestly believe that there is a majority of women in such positions that approach power, decision-making processes and other people in the business relationship in a slightly different manner," she said.

Stimulus vs. Austerity

Lagarde spoke with Amanpour after a meeting with her U.S. counterpart, Treasury Secretary Timothy Geithner.

"There seems to be tension between the United States and Europe over what's the most sensible way to deal with the current lack of growth. The U.S. wants Europe to continue pushing money into the system. Europe is talking about a lot of austerity," Amanpour said.

Lagarde said, "in terms of growth versus austerity, it's the policy that we've adopted in pretty much all European countries [that] we need to address both issues. If we do not reduce the public deficit, it's not going to be conducive to growth."

"Why is that?" she asked rhetorically. "Because people worry about public deficit. If they worry about it, they begin to save. If they save too much, they don't consume. If they don't consume, unemployment goes up and production goes down. So we need to attack that circle from the deficits," Lagarde said.

Later in the interview Amanpour, quoting Joseph Stieglitz, asked if trying to appease the markets was like trying to reason with a crazy man.

"Well, you talk about the crazy man," Lagarde said. "We don't necessarily want to put an actual straightjacket on everything that they do. But we need to put them under supervision. And we need to set rules and regulations that if they violate such rules and regulations, they are really hammered."

Preventing Another Near-Collapse

Are the mechanisms in place to prevent another near-collapse of the financial system?

"I should hope so," Lagarde said. Amanpour pressed her, but she didn't give a definitive answer.

"We've been working really hard in the last two months to put in place what our leaders decided was needed: an alert control system, a supervisory system, discipline in the markets," the minister said. "But it's a constant job because markets are very agile and they reinvent new schemes."