FRANKFURT — When Wolfgang Schäuble, the German finance minister and war horse of European politics, celebrated his 70th birthday at a theater in Berlin last September, two of the most powerful women in the world offered warm words in his honor.
Ms. Lagarde’s presence reflected her close, longtime friendship with Mr. Schäuble. But it also was a confirmation of the enormous stature that Ms. Lagarde and the I.M.F. have acquired in Europe as a result of the euro crisis.
The I.M.F. has more say over crisis management than many euro zone members, and Ms. Lagarde has become a quasi head of state, whose views carry more weight than those of many elected leaders. Indeed, without the I.M.F.’s money and advice, the euro zone might have fallen apart by now. Continue reading