After being busted and led through a perp walk into a Manhattan court (not to mention spending a few nights at Rikers), Dominique Strauss-Kahn officially resigned as head of the International Monetary Fund. By doing so, he set off a furious debate over who should be his successor, which will have worldwide financial implications.
Strauss-Kahn said in a statement: “I want to protect this institution which I have served with honor and devotion, and especially – especially – I want to devote all my strength, all my time, and all my energy to proving my innocence”. Strauss-Kahn has been accused of sexually assaulting a maid while he was in New York on Saturday and was apprehending while on an Air France flight heading home.
The scandal has set off a big headache for the IMF. The organization, which disperses loans to nations in financial distress, traditionally has a European as its head, while an American is the IMF’s deputy and runs the World Bank, respectively. However, as developing nations such as Brazil, China, South Africa, and India are become bigger players on the global stage, in a financial sense, there will be some debate over the next IMF chief, as these nations would probably want someone from a different region to take over.
Many people are being linked to the job, but a potential consensus could center around French Finance Minister Christine Lagarde, a popular and well respected figure in financial circles. The only complication could be that since Lagarde is a member of French President Nicolas Sarkozy’s cabinet, it could fuel rumors of a set-up orchestrated against Strauss-Kahn, who was expected to run for President of France next year.
All in all, the scandal could further hamper the beleaguered IMF, which is attempting to create substantial bailouts via austerity demands for Euro-zone nations such as Ireland,Greece, Portugal, and Spain, all of which are experiencing enormous debt crises.