June 2011: Politics of the budoir

The politics of the boudoir have hit home in the parlours of central banking. Dominique Strauss-Kahn’s departure from the International Monetary Fund under bizarre circumstances has reverberated around the world. By opening up a succession race at the IMF more quickly and more spectacularly than earlier anticipated, it has exposed a feeling of frustration mixed with powerlessness among the developing countries over stewardship of the organisation in charge of world finances.

The former managing director’s demise has left a vacuum in European efforts to resolve the debt crisis, where over the past 15 months DSK’s particular brand of high-voltage economics has added considerably to the momentum (although not necessarily to the efficacy) of European attempts to assist the debt-fuelled euro members to escape an increasingly vicious spiral. And the escapade has added further counterpoint to divergences in economic style in Europe. Irrespective of whether he is guilty of the charges against him, the spectre of Gallic low-living in high places is not likely to spark sympathy among voters in northern Europe asked to sacrifice living standards (or tax reductions) for the sake of their errant southern neighbours.

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