The arrest of IMF managing director Dominique Strauss Kahn at Kennedy airport in New York on sex charges was shockingly surprising.
The arrest couldn’t have come at a worse time for European markets thus leading to other shock waves in the international stock markets. It’s taken as an added uncertainty in the markets. Eurozone already is embattling with bailing out its weak member economies. Greece was about to get bailed out when this news made headlines.
Mr. Kahn was flying from New York when he was arrested at the Kennedy airport in New York on charges of sexual assault and attempted rape of a hotel maid. Mr. Kahn’s reputation as a ‘ladies man’ is working against him.
Initially the European stocks reacted badly amides fear of disruption in taming the Eurozones debit crisis. But the markets seem to be recovering from this shock.
Many analysts hope that there will be no changes in bailout for Greece and Portugal. The IMF will function as normal. The bailouts will take place as it should. So in the short term there seems to be not much harm after the early stock market fall for the economies.
Despite this speculations haven’t come to haul. Will Dominique return to his position as the managing director of the IMF? If not then who? Will the next leader be a European? What will this mean for the Eurozone? Will the emerging economies have something for them in it? Questions like these are boggling the world at the moment.
An official in Brazil told Reuters that they would want the next head at the IMF to become from the emerging markets. The role of IMF in emerging markets has not been significant. Many Asian nations still lack faith in the institution. Especially after the 1997 Asian economic crisis. The Koreans call it ‘the IMF crisis’.
Well a head from the emerging economies seem to a be distant dream as for now. But other issues are baffling at the moment.
Who would be the next head is the big question now. Will he be from Europe or America? If the head is from America lot of policy changes are in sight. Mr. Kahn till now had played a key role to tame the Eruozone’s debt crisis with him gone and America at the heads will the same zeal continue is in doubt?
With Kahn gone will it mean and end against the dollar diplomacy. Mr. Kahn had proposed that Dollar should be done away as the single dominant currency rather SDR should be given the power. Many emerging nations like Brazil and China had voiced it as well but what will happen to this issue nobody knows.
Will the next head be efficient enough to bring back the world economic balance? Mr. Kahn had been quite good at his work. As for now the work is still going on. Only future will tell what lies ahead.
Will this bring a fresh wave of changes with hope for Europe and promise for emerging markets is yet to be seen. A long wait till that morning comes.