IMF arrest rocks French politics

He could have been the next president of France, but instead Dominique Strauss-Kahn sits tonight in a New York City jail. Yesterday's news that the International Monetary Fund head was arrested for attempted rape has sent shock waves throughout Europe. DSK, as he is known in his native France, was set to become the Socialist candidate to challenge French president Nicolas Sarkozy in next year's election. Opinion polls had indicated that he could defeat the French president. Now with DSK out of the picture, France looks set for another five years of Sarkozy.

The French Socialist party has been in disarray for years now, without a clear leader who could defeat Sarkozy. Strauss-Kahn ran for president in 2007, but lost his party's nomination to Segolene Royal (who eventually lost to Sarkozy). After Sarkozy won he nominated Strauss-Kahn to head the IMF, undoubtedly to remove a formidable political enemy from the country. DSK's time at the IMF has been considered successful, as he has navigated the fund through a difficult period of economic crisis and debt bailouts in Europe.

The French media today has been all DSK all the time. It's a political earthquake that has sent the entire country spinning. Some of the media coverage has conjured up conspiracy theories, while others are blaming the "Anglo-Saxon world" for persecuting their poor misunderstood Gallic hero. Some die-hard Socialists are convinced that the whole thing is a set-up by Sarkozy's UMP. The fires of their conspiracy theories have been fanned by the fact that apparently the news was tweeted by a young UMP activist even before the arrest took place. Many have suggested that the maid making the accusation was set up as a honey trap. A poll this week found that 57% of French people believe Strauss-Kahn was set up, and the figure shoots up to 70% among Socialists.

Many European papers have focused on the fact that France has for so long ignored the sexual misdeeds of its politicians. But given that Strauss-Kahn committed his offense in the United States where he now lives, that luxury wasn't afforded him. “France is now experiencing its first 'Anglo-Saxon' sex scandal, and has brutally entered a zone of public debate which, until now, because of cultural exception, 'Latin' identity or democratic weakness, was hitherto confined to rumours and gossip amongst a select circle of insiders," wrote the Liberation.

Of course what the French press is alluding to is the country's many philandering presidents of the past. The many extramarital affairs of President Jacques Chirac were well known but never discussed, and Francois Mitterand is said to have effectively run a harem in the Elysee Palace. But the accusation against DSK is far more serious than any of that. He stands accused of sexually attacking a hotel maid and locking her in his room with the intention of raping her. If true, it's a shockingly monstrous abuse of power. And even if it's not true, DSK's well-known reputation as a serial seducer will mean that people are predisposed to believe it.

Having DSK out of the IMF will also have huge implications for the ongoing European bailouts, which are being coordinated by the IMF and the EU. If DSK's replacement is not a European it will have a huge impact on the continuing bailout saga and the eurozone debt crisis. Developing countries in the fund who have been unhappy that it has become a European bailout mechanism over the past year may use this opportunity to assert their authority and refuse to confirm a leader who will continue the European influence at the fund.

Many in Europe were unhappy about having the IMF involved in the bailouts in the first place. Last year France and Southern European states opposed having the IMF involved in the EU bailout fund at all. They see the Washington-based IMF as being a US-dominated institution and thought that it would be better for Europe to remain in control of the bailout mechanisms on its own. But German Chancellor Angela Merkel said she would not support the bailout fund unless the IMF was involved. in the end it was the fact that a European - a Frenchman no less - was in charge of the IMF that allayed the French and Southern European concerns. Now if the chair goes to an American, there is likely to be increasing discontent over the IMF's involvement in European affairs.

European leaders have been scrambling to get in front of this story and insist that the new chair should be a European. European Commission president Jose Manuel Barroso told a Dutch TV station yesterday that if the fund needs a new chief Europe should propose a candidate. Eurozone finance ministers meeting yesterday in Brussels echoed this point, stressing the need to maintain the current Europe-America balance in the IMF.

Amazing that a man's entire career, and indeed the future of Europe, could have been affected in the space of just a few minutes at a Sofitel in New York.