Leading article: A blow to the IMF when it least needs it

Click to follow
The Independent Online

The dramatic arrest in New York of Dominique Strauss-Kahn comes at a difficult time for the International Monetary Fund. He has been indicted with attempted rape, and even if the charges come to nothing, it is hard to imagine him remaining at the helm of the fund.

Along with the expected departure in August of his deputy, John Lipsky, it threatens to leave a vacuum at the IMF's heart at a critical moment. Had he not been marched off an Air France flight on Saturday, Mr Strauss-Kahn would have headed to a meeting yesterday with the German Chancellor, Angela Merkel, on the debt crisis and then on to another today in Brussels with EU finance ministers on further rescue packages for the most troubled euro-zone countries.

As an architect of the European single currency and as a passionate advocate of Europe's political and economic convergence, his potential departure is unhelpful at a time when the euro needs as many supportive and stabilising influences as it can get. His exit could also have an impact on the two most stricken euro-zone economies, Greece and Portugal. They may find a new IMF director less willing to bail them out in the name of European solidarity than Mr Strauss-Kahn has been. The danger will be greater if a new IMF director is selected from an emerging economy, such as China, or Brazil.

Another institution left reeling by this affair is the French Socialist Party. Mr Strauss-Kahn had been expected to take up the challenge of unseating Nicolas Sarkozy on behalf of the left in next year's presidential elections. With Mr Sarkozy languishing in the polls, hopes had been high on the left that the magisterial Mr Strauss-Kahn might sweep into the Elysée in 2012, having augmented the Socialist core vote with extra votes gathered from the centre ground. Those hopes lie in ruins, for a consensus is emerging in France that merely to be accused of such a grave sexual offence is degrading in itself. Both Mr Sarkozy and the far-right candidate, Marine Le Pen, will feel relieved if this formidable opponent can be forced from the race and the Socialists made to pick a less popular standard-bearer.