Arrestatie IMF-topman vertraagt besprekingen economische reddingsplannen (en)
EUOBSERVER / BRUSSELS - The arrest on sexual assault charges of International Monetary Fund (IMF) chief Dominique Strauss-Kahn i, a supporter of eurozone bailouts, is set to complicate Greece's bid to extend its EU-IMF loan as euro finance ministers gather in Brussels on Monday (16 May).
The euro fell half a cent on the Asian markets on Monday morning amid confusion over what will happen to the Greek bailout following the sensational arrest of the French centre-left politician.
Tipped to become French President Nicolas Sarkozy i's main rival in the 2012 elections, Strauss-Kahn was detained in New York on Sunday shortly after boarding a flight to Germany, where he was to hold talks with German Chancellor Angela Merkel i ahead of the eurozone talks on Monday.
The US court is to hold a first hearing later today, after a 32-year old maid accused him of trying to rape her in a luxury suite in the Sofitel hotel.
"She told detectives he came out of the bathroom naked, ran down a hallway to the foyer where she was, pulled her into a bedroom and began to sexually assault her," New York Police Department spokesman Paul Browne said. "She pulled away from him and he dragged her down a hallway into the bathroom where he engaged in a criminal sexual act, according to her account to detectives. He tried to lock her into the hotel room."
The maid escaped and went to the police. Strauss-Kahn left the hotel, but forgot to take his mobile phone. He later called and asked about his mobile, which helped police to track him to the airport.
The 62-year old says he did nothing wrong. His wife, Anne Sinclair, a prominent French journalist, also said "he will be proved innocent." But reports of alleged assaults on other women are beginning to come out in the press.
The news came as a shock to the IMF, with top officials grappling to cope with the leadership crisis on Sunday.
Deputy IMF chief John Lipsky, an American official, stepped in as acting managing director, while Egyptian economist Nemat Shafik is to replace Strauss-Kahn at the eurozone ministers' meeting in the EU capital.
The scandal is also likely to impact the appointment of his successor.
So far the IMF has always been headed by a European with an American deputy. But the recent developments may fuel calls from emerging economies to hand over the chairmanship to someone from Asia or Latin America.
Eurozone ministers on Monday night are expected to finalise together with the IMF the details of an aid package for Portugal and to discuss how best to deal with Greece's massive debt burden.
Greece is facing trouble repaying bonds, despite its a multi-billion-euro EU-IMF loan agreed last year. Germany has called for even deeper budget cuts and privatisations if Athens is to receive extra money or an extension of its loan repayments.
Greece must "intensify its consolidation efforts" ECB executive board member Juergen Stark told the Berlin-based Tagesspiegel newspaper in an interview to be published today. "False policies going back years have to be corrected -- debt forgiveness wouldn't change this."