WHEN: Today, Monday, July 29, 2024
WHERE: CNBC’s “Squawk Box”
Following is the unofficial transcript of a CNBC interview with ECB President Christine Lagarde on CNBC’s “Squawk Box” (M-F, 6AM-9AM ET) today, Monday, July 29 from Paris. Following are links to video on CNBC.com: https://www.cnbc.com/video/2024/07/29/ecb-president-christine-lagarde-on-sports-background-lessons-from-swimming-and-journey-to-finance.html and https://www.cnbc.com/video/2024/07/29/ecb-president-christine-lagarde-on-the-economic-impact-of-the-olympics.html.
All references must be sourced to CNBC.
PART I
BECKY QUICK: While we’re here in Paris, I caught up with the President of the European Central Bank, Christine Lagarde. We all know her from her role in global finance, but she’s got a fascinating history as a competitive artistic swimmer, which is in part why she’s here at this year’s Olympics.
CHRISTINE LAGARDE: I’m here because I was invited. The President of the International Olympic Committee, Thomas Bach, said to me, you are an athlete. And I said, well, not anymore, but I was. He said, well, you have to come because the games will be amazing. And I really would like you as a former athlete to be there with us to celebrate the Olympic spirit and the achievements of the athletes. So that’s why I’m here.
QUICK: For those who don’t know, you are a former artistic swimmer. A synchronized swimmer.
LAGARDE: Yeah.
QUICK: Tell people a little bit about that. How did you get started? What first got you into a pool and when?
LAGARDE: That was back in ’67. So I started practicing because my friends were doing it as well. Then came ’68. In ‘68, you had all these rioting and mess everywhere. My parents at that point said, you can go to the swimming pool as much as you want. Hang out at the club, but just stay there. So that was the deal. You know, no — no messing around in the streets of my hometown. So I went to the swimming pool every day and I was practicing and swimming and practicing with my friends. And, you know, you get better and better simply because you work harder and harder. That’s how I got really started. And then competition came along. And unfortunately, it was never in my days an Olympic sport. I did European championship. I did major events, but never the Olympics. So it’s a beautiful moment for me to watch and to enjoy those young girls who are swimming, synchronized swimming.
QUICK: I mean, there have been people who sometimes say that it’s not really a sport. What do you say to them?
LAGARDE: I say to them, stuff you. Just try. Just try, because it’s — it’s a super hard sport. It’s one where you have to swim really well. It’s one where you have to hold your breath for, you know, I still — I can still swim 50 meters underwater.
QUICK: Wow.
LAGARDE: OK, but in those days it was at least 50 meters underwater. And it’s one where you have to be very, very aware of your vertical. You have to be extremely precise and you have to pay attention to details. So it brings together the techniques of an athletic sports, but also the — the details of almost ballet together and a sense of music and rhythm and a sense of the team. So good luck to those who say it’s an easy sport. No, it is not. It’s really hard.
QUICK: And by the way, you have to do it all while you’re smiling the entire time.
LAGARDE: Yes. That was something that my coach used to say because it’s a sport where you learn about effort, teamwork. But you also learn about something that is unfair because it’s — you know, you have technical figures that you have to do before you do the team events. And those technical figures are judged by human beings, you know, judges. They look at you, they give you a particular note depending on how well you do or how well they think that you do. And there is often an element of injustice about it because you feel that you did really well and they think that you didn’t do so well. So our coach in the national team used to say, when you feel it’s unfair, grit your teeth, smile and get on with it. And that’s been a good lesson for me always.
QUICK: How do you carry that forward? How — how are the lessons that you learned as a swimmer, things that you can still rely on today?
LAGARDE: Grit your teeth and smile in adversity is one that I always have with me. And I recommend it to my team as well. You know, since the things don’t happen randomly, you have to work hard, you have to earn it. The fact that it’s a team effort, you’re not going to succeed all by yourself, even if you are super, super good. Resilience, you can fail, but you have to bounce back, get back on your feet and try again. I think all that works in real life and in your job as well.
QUICK: Have you ever had moments, you’ve been through so many crises in your time as a leader here, as the IMF, as the Finance Minister here in France, have you ever had moments where you have to go back on your training, whether that be grit your teeth and smile, whether that be breathing exercises? What do you kind of utilize today?
LAGARDE: It’s very, really good question, because I do keep these breathing habits that I have. So when I have to give a speech, when there is a moment of angst or when there is a moment of crisis and everybody gets a bit panicked and hyper, then I take it in and I do the breathing that I will not demonstrate now. But —
QUICK: I kind of want to learn it.
LAGARDE: Yeah, you essentially breathe from — from the bottom of —
QUICK: The diaphragm.
LAGARDE: Yeah, exactly, diaphragm. Then you take it in, then you hold it for a few seconds and then you let it out again. And you do — do that several times. It just calms you down. And yeah, I still do it.
QUICK: When’s the last time you did it at work, at a work environment?
LAGARDE: I’d say I do that before any governing council meetings, any speaking engagement. Speaking engagements are the ones where you think to yourself, OK, am I going to keep the audience interested? And you have to have enough confidence and enough calm about you to do it.
QUICK: When you were a teenager, you were in Washington, too?
LAGARDE: Yeah.
QUICK: You swam while you were there?
LAGARDE: I was just out of the national team in France and I was excited to go to the United States to live there. I was 17 at the time, but I was very disappointed that I was giving up my membership in the national team. So what happened is that my American family, Marion and Bill Atkins, were so good. They tried super hard in Washington, D.C. Back in ’73, they tried to find a synchronized swimming club. And there was one at the Rockville Jewish Community Center. So we went. I showed what I could do. And they said, OK, we’ll take you in. So I joined the team and I actually swam with the team in the U.S. national championship.
QUICK: Wow.
LAGARDE: That was cool.
QUICK: You had a pretty incredible year when you were there. You were also involved with helping doing some translation at a congressman’s office, too. What happened?
LAGARDE: Well, it was — I had to be an intern for a period of time at the end of my — my school year at Holton-Arms. And I was lucky to — to work for Congressman Coyne. He then became senator and then became Defense Secretary for President Clinton. But Bill Coyne was my — in a way, he was my first boss. And he was the youngest member of the House Judiciary Committee at the time of Watergate. And I was translating into French the letters that he was sending to his constituents who on the border of Maine and Canada spoke essentially French. So that was my job for a couple of months. And I just loved it.
PART II
QUICK: Over the weekend here in Paris, I sat down with the European Central Bank President Christine Lagarde. We all know her from her role in global finance. But long before her time at the ECB and the IMF, she was a competitive synchronized swimmer. She learned many lessons from swimming that still help her in her career today. And given the global turmoil that we’re seeing right now, she thinks the Olympics are more important than ever.
LAGARDE: I think sports in and of itself is a fabulous lesson of life. But the Olympics bring people of 200 plus nationalities together. They compete. They live in the same village. They have to bear with each other. They have to understand each other. And they have to respect the rules of the Olympics. They cannot cheat. They have to compete fairly. They cannot take any drugs. And it’s a competition that is organized. I think the Olympics have this beauty about them that all nationalities are there. All athletes are, you know, on the level playing field in many ways. Some have better, you know, terms of practice and training, of course. But I think there is a genuine sense of coming together. We are different. There is huge diversity of all sorts. But we are united in the respect of sports. So this is a fabulous lesson. And one that I hope the athletes and those who support them and those who watch them can take away thinking, well, yes, we can and we should live together in peace. Peace is one of the big themes of the Olympics. And this year it was demonstrated.
QUICK: Yeah. We watch what this means from an economic perspective, too. And just last month there were questions about whether the Bank of England was going to have to reconsider —
LAGARDE: Oh Taylor Swift.
QUICK: Taylor Swift, whether they were going to have to reconsider, whether they could cut rates because inflation was a little higher. People thought it was because of Taylor Swift. If that’s what Taylor Swift can do to a country, what does the Olympics do not only to France but to the European economy at large?
LAGARDE: It’s highly debated amongst economists, as all topics, because economists like to have one hand, the other hand. But, you know, it brings additions to the economic relationships through various channels. One is, if you look around at Paris, for the last three or four years there has been enormous construction sites, work, infrastructure being developed, transportation extended. So that is going to bring about some additional, it has brought about some additional activity and it is going to be conducive to more activity, better housing and development. That’s one. The second one is, if you look around, there is a lot of consumption going on at the moment. You know, people are buying, people are exporting and a lot of people are coming to visit. So that’s, again, another channel. And I think the third one is confidence. You know, we complain a lot about uncertainty and there is plenty of that around. But confidence is something that is critical to relationships, to economic developments. And typically large sport events bring about that added confidence that we so much need at the moment. How much exactly? It’s hard to say.
QUICK: Right. How do you strip it out as a central banker?
LAGARDE: And it spreads over time as well.
QUICK: Yeah.
LAGARDE: Infrastructure typically bring, you know, something around 0.4% additional GDP over a period of time. You take it. In 2024, in the next few months, probably an additional 0.1 — it’s anywhere between 0.1 and 0.3 additional, which will probably reduce in the fourth quarter. We’ll see. But it brings, it’s an add-on for sure.
QUICK: And a challenge to try and figure out what the metric is, just how much it changes things, I suppose.
LAGARDE: It’s very difficult to measure. So if I take the example of France, when we look at services, the service PMI has gone up for the first time last month. Whether or not it’s directly related to the Olympics, don’t know. But it’s the first time it’s turning, you know, positive. So it might be related.
QUICK: Could be.
LAGARDE: We can only measure that with the level of certainty exposed. So let’s see.
QUICK: Next week, the Federal Reserve’s meeting and the markets are watching very closely. What are you all thinking? You’re watching closely, too, I take it?
LAGARDE: We’re watching closely, too, yes.
QUICK: I guess I wonder, where are you headed today? What are you going to be watching tonight?
LAGARDE: Tonight, together with my husband —
QUICK: Yeah.
LAGARDE: We will be watching the swimming event. Not synchronized swimming, not artistic swimming, but plain swimming. And I’m very much looking forward to that. I hope we will hear the Marseillaise, our national anthem, play tonight. But we’ll see.
QUICK: And you will come back for synchronized swimming or artistic swimming as well.
LAGARDE: Yes, yeah. I’m coming back on the 6th of August and I’m absolutely adamant that I will watch the team final event, which should be spectacular. And I don’t want to bet on who is going to win. But it’s — I know it will be beautiful.
QUICK: And I take it you follow the sport very closely, though.
LAGARDE: I try to. I follow finance and financial news and macroeconomic numbers and markets a bit closer. But I try to stay in touch with sports.
QUICK: You still swim?
LAGARDE: Yep. As much as I can and whenever I can. It used to be much easier in Washington, D.C. It’s more complicated in Frankfurt. But in D.C. I used to swim every day, every morning from April to October.
QUICK: Why was it easier there?
LAGARDE: Just — because there was a small swimming pool on the top and I would get up at 5:30 or 6:00 o’clock so there wouldn’t be anyone on top of my building. There wouldn’t be anyone there. So I would go back and forth. Very good at turns because it was a small pool. But I enjoyed it tremendously.
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