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Will the IMF rape scandal hurt the U.S. economy?
Dominique Strauss-Kahn's arrest in New York has thrown the world's financial rescue squad into disarray
 
While many world leaders call for IMF chief Dominique Strauss-Kahn's resignation, some worry that the scandal could have disastrous consequences for the economy.
While many world leaders call for IMF chief Dominique Strauss-Kahn's resignation, some worry that the scandal could have disastrous consequences for the economy.
REUTERS/Shannon Stapleton

A New York judge has denied bail for International Monetary Fund chief Dominique Strauss-Kahn, who is charged with sexually assaulting a hotel maid on Saturday. As lurid details of the alleged attack circulate, calls have erupted for Strauss-Kahn to resign. Officials inside the IMF said the scandal is a "disaster" for the organization and its efforts, led by Strauss-Kahn, to resolve Europe's debt crisis. Could this feed the financial turmoil overseas, and drag the U.S. economy back into recession?

Yes, it is that bad: Strauss-Kahn has been "particularly flexible with Greece during bailout talks," says The Huffington Post. "With his arrest, the prospect of a quick resolution to the Greek situation has been cast into doubt." If Greece or another struggling European country goes under, the economic recovery in the U.S. — and across the world — could be in jeopardy.
"Strauss-Kahn's arrest a 'disaster' for IMF, casts doubt on Greece, recovery"

No, the IMF will carry on as before: Relax, says Orlando Crowcroft at Gulf News. "A change of leadership at the International Monetary Fund is unlikely to result in a shift in policy in the long term." European ministers are gathering this week to discuss financial aid for Portugal and Greece, and they're not going to throw up their hands just because Strauss-Kahn isn't sitting at the table. The IMF is an institution, not a one-man show.
"No policy change after Strauss-Kahn"

It all depends how the IMF handles the crisis: Yes, the IMF is an institution, says Hugues Honore at Agence France Presse. But it's an institution that has been embarrassed and left rudderless. Strauss-Kahn's temporary replacement — his No. 2, John Lipsky — is scheduled to leave in August. If the world's economic crisis manager is going to bounce back in time to avoid serious damage, it has to come up with fresh leadership, fast, and put this scandal behind it.
"Strauss-Kahn arrest throws IMF into disarray"

 

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