by Landon Thomas Jr.
New York Times
May 15, 2011
It’s hard to imagine a worse time for the International Monetary Fund to be without a forceful European leader.
Sinking under a mountain of debt, Greece is on the verge of requesting more help from the European Union and the international fund. Ireland’s economic recovery from its banking crisis remains a distant prospect at best. And once an international aid deal is concluded for Portugal, the question shifts to whether Spain’s much larger and increasingly stagnant economy may need a financial lifeline.
Indeed, the most bitter twist for Dominique Strauss-Kahn is that his personal crisis comes at a time that the I.M.F.’s influence globally is at a many-decades peak, especially within Europe, his own stomping ground.
During his tenure as managing director of the fund, Mr. Strauss-Kahn is widely credited with expanding the fund’s resources after the financial crisis, improving its governance and essentially restoring its relevance by replacing orthodoxy with pragmatism.
Before being taken into custody in New York on Saturday afternoon on charges related to sexual assault, Mr. Strauss-Kahn had boarded a flight to Europe to meet the German chancellor, Angela Merkel, to discuss in detail how Europe and the I.M.F. would respond to the deteriorating economic situation in Greece.
Mr. Strauss-Kahn was known to be a powerful voice arguing that continuing austerity measures in Greece would only make the situation worse. The Greek economy has shrunk by as much as 4 percent this year from a year ago, after the international community laid out guidelines for reducing its debt, raising taxes and reining in spending.
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