The sexual assault allegations against Dominique Strauss-Kahn, until Thursday the head of the International Monetary Fund, and his subsequent arrest and indictment in New York represent a major fall from grace of one of the most powerful and influential people in the world of international finance.
The IMF is an organisation of 187 countries that works to further global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth and reduce poverty around the world
The charges against Strauss-Kahn, which he denies, are extremely serious, but at this stage they remain allegations, and like any other person he is entitled to a presumption of innocence until proven guilty.
Although Strauss-Kahn has a reputation of a womaniser – something the French press and society have no problem with – the charges of sexual assault have left France in a state of shock.
The French were also greatly upset by press photographs of Strauss-Kahn being led into court in handcuffs, something which is considered normal in the US justice system but which is technically illegal in France.
It is interesting to note that according to an opinion poll, 57 per cent of French citizens believe Strauss-Kahn, the frontrunner in France’s 2012 presidential election, was the victim of a set-up.
At the IMF Strauss-Kahn was instrumental in leading efforts to stabilise the global financial system and to provide assistance to the eurozone during its debt and banking crisis.
He is a problem-solver and an excellent negotiator and is credited with convincing German Chancellor Angela Merkel to support a bailout for those eurozone countries in need. His resignation from the IMF comes at a critical time – the organisation is still negotiating further help for the eurozone – and a suitable replacement needs to be chosen as soon as possible.
The leading contender appears to be French Finance Minister Christine Lagarde, who would be an excellent choice, but emerging economic powers are pressing for an end to the practice of a European always being given the top job at the IMF in return for an American heading the World Bank.
While competence, rather than nationality, should be the criterion used in selecting a new IMF head, the major G7 economies hold more voting rights than the emerging market and developing countries at the IMF, so it is likely that a European will get the top job.
However, some sort of deal could be reached, such as awarding the post of deputy managing director of the IMF, which becomes vacant later on this year, to a candidate from the emerging economies.
The allegations against Strauss-Kahn have also severely shaken the French Socialist Party, which until a few days ago was tipped to win next year’s presidential election if Strauss-Kahn was the party’s nominee.
With little less than a year before April’s first round of presidential elections, Strauss-Kahn was easily beating French President Nicolas Sarkozy in the opinion polls, so this latest incident is a severe setback for the Socialists.
Strauss-Kahn’s high profile and successful leadership of the International Monetary Fund enhanced his international stature and encouraged him to launch a bid for the French presidency. He had been expected to officially declare his intention to bid for the Socialist Party’s nomination in a few weeks’ time.
The former IMF managing director’s presidential ambitions are now history and Strauss-Kahn’s affair throws next year’s French election wide open. Strauss-Kahn, a former French Finance Minister and an ex-economics professor, belonged to the moderate wing of the Socialist Party and appealed to France’s centre and centre-right electorate, besides his natural Socialist base.
The Socialists will need to find a candidate with Strauss-Kahn’s stature, intellect and centrist appeal if they want to defeat Sarkozy. This will not be easy. For example, the present leader of the Socialist Party, Martine Aubry, who is likely to put forward her candidacy for the party nomination, is a standard bearer of the left, and has little appeal beyond Socialist supporters.
Will these sex-crime charges against Strauss-Kahn change the French media’s attitude to the personal lives of French politicians? Strauss-Kahn told the Liberation newspaper last month that the three trickiest issues in his presidential bid would be “money, women and my Jewishness” adding: “Yes I like women. So what?” However, no media uproar followed.
Similarly, French President Francois Mitterrand once answered, “Yes, it’s true, and so what?” when a journalist asked him whether it was true that he had an out-of-wedlock daughter. Only after Mitterrand died did it emerge that the French government had financially supported his mistress and daughter.
It is difficult to say what effect these charges against Strauss-Kahn will have on the French press and one must keep in mind there are very strict libel and privacy laws in France.
However, this latest incident has certainly shocked French society and the country’s political class, and is bound to have a major effect on next year’s presidential election.