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French Socialists keep distance from DSK

French Socialists are distancing themselves from Dominique Strauss-Kahn, the ex-IMF boss once tipped to beat Nicolas Sarkozy in next year's presidential vote, as he heads home after a New York
sex scandal.

Published: 1 September 2011 10:48 CEST

They welcomed the dropping of sexual assault charges against the former International Monetary Fund chief on August 23, with party leader Martine Aubry saying she felt “immense relief.”  

But the mood has changed since the Socialists held their summer conference last weekend which saw the top contenders in the party’s presidential primary — Aubry, Francois Hollande and Segolene Royale — face off.

Aubry repeated on Tuesday that she had always insisted that Strauss-Kahn, who was a finance minister in a previous Socialist government in France, benefit from the presumption of innocence.

But she notably added: “I think the same as many women about the attitude of Dominique Strauss-Kahn to women.”  

Michel Rocard, a Socialist elder statesman and former prime minister, went even further in calling Strauss-Kahn’s character into question, saying that the former IMF boss suffered from a “mental illness.”

“This man quite clearly has a mental illness that makes it difficult for him to control his urges,” Rocard told Canal+ television, alluding to persistent rumours of improper conduct towards women by Strauss-Kahn.  

Strauss-Kahn, 62, resigned as the IMF’s managing director after he was arrested and charged in May with sexually assaulting and attempting to rape a hotel maid in New York.  

But he walked free last week when a judge dismissed the charges after prosecutors said they could not pursue the case because the accuser’s lies had made it impossible to prove her accusations beyond a reasonable doubt.  

The Guinean-born woman is pursuing a civil case against Strauss-Kahn, while in France he faces allegations that in 2003 he tried to rape a French writer.

Strauss-Kahn denies the charges and accuses the writer of slander.  

Strauss-Kahn’s passport was returned to him by US authorities last Thursday, but the remaining Socialist candidates hope that his eventual return to France will be sufficiently low key so as not to disrupt their primary.

Aubry said on Tuesday she expected him to return to France within a few days.  

In seven weeks, Socialist supporters will vote in a primary to choose the party’s candidate to face Sarkozy next April.  

Sarkozy is languishing in opinion polls and the French economy is flatlining, so whichever Socialist emerges from the primary ought to be in with a chance in May.  

But the party has been left in disarray by the spectacular burnout of its former hero Strauss-Kahn. 

The gloves have come off in the primary battle, despite repeated pleas from the party for a good clean fight that will leave the centre left united behind a single unbloodied flag-bearer.  

“When I took over the Socialist Party we were an object of pity … We were not ready to rule,” Aubry declared at the conference, hailing her own three-year-old leadership of the party, but also stabbing her predecessor Hollande.  

An IFOP survey published on the opening day of the party conference placed Hollande way out in front among first round primary voters at 42 percent, followed by Aubry on 31 and Royal on 18.

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ECONOMY

World unprepared for next financial crisis: ex-IMF chief Strauss-Kahn

The world is less well equipped to manage a major financial crisis today than it was a decade ago, according to Dominique Strauss-Kahn, a former chief of the International Monetary Fund (IMF).

Published: 9 September 2018 14:08 CEST
World unprepared for next financial crisis: ex-IMF chief Strauss-Kahn
Former French Economy Minister and former managing director of the International Monetary Fund (IMF) Dominique Strauss-Kahn , poses during a photo session in Paris on Thursday. Photo: JOEL SAGET / AFP
In an interview with AFP, the now-disgraced Strauss-Kahn — who ran the fund at the height of the 2008 financial meltdown — also said rising populism across the world is a direct result of the crisis. 
 
Strauss-Kahn resigned as head of the IMF in 2011 after being accused of attempted rape in New York, although the charges were later dropped. He settled a subsequent civil suit, reportedly with more than $1.5 million.
 
Q: When did you become aware that a big crisis was brewing?
 
A: When I joined the IMF on Nov 1, 2007, it became clear quite quickly that things were not going well. That is why in January 2008, in Davos, I made a statement that made a bit of noise, asking for a global stimulus package worth two percent of each country's GDP. In April 2008, during the IMF's spring meetings, we released the figure of $1,000 billion that banks needed for their recapitalisation.
 
Q: Did the Bush administration grasp the danger of Lehman Brothers going bankrupt?
 
A: No, and that is why Treasury Secretary Henry Paulson decided not to save Lehman, because he wanted to make an example of it in the name of moral hazard. Like everybody else, he considerably underestimated the consequences. Allowing Lehman to go under was a serious mistake. Especially because only a week later they were forced to save the insurer AIG, which was much bigger.
 
Q: Ten years on, are we better equipped to deal with a crisis of such a magnitude?
 
A: No. We have made some progress, particularly in the area of banks' capital adequacy ratios. But that is not nearly enough. Imagine Deutsche Bank suddenly finding itself in difficulty. The eight percent of capital it has at its disposal are not going to be enough to solve the problem. The truth is that we are less well prepared now. Regulations are insufficient.
 
Q: How so?
 
A: After 2012-2013 we stopped talking about the need to regulate the economy, for example concerning the size of banks, or concerning rating agencies. We backtracked, which is why I am pessimistic about our preparedness. We have a non-thinking attitude towards globalisation and that does not yield positive results.
 
Q: Do we still have international coordination?
 
A: Coordination is mostly gone. Nobody plays that role anymore. Not the IMF and not the EU, and the United States president's policies are not helping. As a result, the mechanism that was created at the G20, which was very helpful because it involved emerging countries, has fallen apart. Ten years ago, governments accepted leaving that role to the IMF. I'm not sure it is able to play it today, but the future will tell.
 
Q: Do you believe that Donald Trump's election is a consequence of the crisis?
 
A: I believe so. I'm not saying that there was a single reason for Trump's election, but today's political situation is not unconnected to the crisis we lived through, both in the US with Trump and in Europe.
 
Q: Connected how?
 
A: One of the consequences of the crisis has been completely underestimated, in my opinion: the populism that is appearing everywhere is the direct outcome of the crisis and of the way that it was handled after 2011/2012, by favouring solutions that were going to increase inequalities.
 
Quantitative easing (by which central banks inject liquidity into the banking system) was useful and welcome. But it is a policy that is basically designed to bail out the financial system, and therefore serves the richest people on the planet.
 
When there's a fire, firemen intervene and there is water everywhere. But then you need to mop up, which we didn't do. And because this water flowed into the pockets of some, and not of everyone, there was a surge in inequality.
 
By AFP's Antonio Rodriguez