Host: Richard Werly
Date: 30 May 2011
The IMF after the Strauss-Kahn scandal in the US
French Finance minister Christine Lagarde, though absent from Deauville, has secured the backing of the G8. There is consequently a very good chance to see her elected soon to replace M. Strauss-Kahn, soon to be on trial in the US for alleged sexual assault. Nevertheless, Christine Lagarde’s position will be quite different from her predecessor.
She will be under much more pressure from emerging countries to negotiate tough conditions for Europe’s financial rescue plans. She will also be challenged politically, especially on the European front, as M. Strauss-Kahn, a fluent German speaker, was a key factor in the negotiations between Paris and Berlin.
The euro-zone and the economic challenges ahead
Nicolas Sarkozy, host of the Deauville summit, has reaffirmed strongly the willingness of all euro zone leaders to defend the European single currency and therefore to avoid a Greek debt restructuring.
We believe a Greek default is therefore excluded for the time being. Europe, consequently, will have to put its acts together and probably re-negotiate a new rescue plan for Athens, which is on its way to becoming insolvent.
Libya and the ‘Arab spring’
The G8 has made one of its strongest financial commitments ever, promising €40 billion of aid to the Arab countries in transition. The call to remember, nevertheless, was the one from Tunisian and Egyptian Prime Ministers who were invited to meet with G8 leaders. Both of them urged the international community to quickly put its act together, so that the economic momentum could be seized and their population could see the changes at work.
Questions? Post a comment below, or e-mail Richard Werly at richard.werly@letemps.ch
