How the Strauss-Kahn Case Damages Europe

Dominique Strauss-Kahn was buckled up and headed for Berlin on May 15 when he was yanked off an Air France jet on the tarmac, charged with the sexual assault of a hotel maid, and thrown into New York City's Rikers Island prison complex. The act for which he stands accused (and to which his lawyers say he intends to plead not guilty) is despicable. Even if he is exonerated, it's difficult to imagine how the man known as DSK could make a credible return to power. In the calculus of damage, it's not only Strauss-Kahn who will lose. It is Europe.

While the International Monetary Fund is a global concern, saving the European Union has been Strauss-Kahn's primary mission in recent years. "At these high levels and issues of national and global importance, personal stature and personal chemistry do matter," wrote Jan Randolph, head of sovereign risk analysis at IHS Global Insight, after Strauss-Kahn's arrest. "DSK has been involved right from the start." The IMF's managing director—a high-living socialist who was apparently hiding more paradoxes than previously known—used his charisma to keep Greek Prime Minister George Papandreou committed to politically harmful but necessary reforms. He prodded and coddled German Chancellor Angela Merkel over the design of the various bailout packages, their terms, and the need for a more permanent solution to the wider euro zone crisis, Randolph wrote. "The presumption was that with Strauss-Kahn at the helm, the IMF would not turn its back on Europe, that the IMF would continue to support Europe. Now, with Strauss-Kahn gone, that proposition becomes a little dubious," says Eswar Prasad, a senior fellow at the Brookings Institution in Washington. The next IMF chief may not be nearly as charismatic as DSK—and may not even be European.