The stunning turnabout in the criminal case against Dominique Strauss-Kahn, whom prosecutors in New York City agreed to release on his own recognizance on Friday, has immediately raised questions about the former International Monetary Fund chief's future in politics and finance, once deemed to be over.
If the charges against him are dismissed, any number of possibilities are imaginable, even a triumphant return to the 2012 French presidential race, in which "DSK" had expressed interest before he was arrested in May. But one thing is certain: Strauss-Kahn won't be returning to his post at the IMF. His successor, French Finance Minister Christine Lagarde, takes over next week. "She's a done deal. Starts July 5," a senior IMF official told National Journal on Friday.
The full outcome of Strauss-Kahn's legal issues is still uncertain in the wake of revelations by The New York Times that prosecutors now doubt the veracity of his accuser, a Guinean maid at the Sofitel Hotel in Manhattan. On Friday, he was released from house arrest.
But the French mainstream media had already been suspicious of the charges against him. If those are dropped by New York prosecutors, it is possible that Strauss-Kahn could regain his political reputation in France. Before his arrest, DSK had been polling well against incumbent French President Nicolas Sarkozy even though he had not yet disclosed his candidacy.
"He had told me he was getting ready to make the change [from the IMF] and focus on the presidential run," a friend of Strauss-Kahn in the financial community said on Friday, speaking on condition of anonymity. Although DSK had long been dogged by allegations about his behavior toward women, it seems less likely that this could become an issue if he was exonerated from the charges in New York.
Strauss-Kahn had also been deeply involved in critical talks to ease Greece's debt problems, but there too he is unlikely to play any part in the immediate future. French and German banks have already agreed to roll over some of their holdings of Greece's debt, a policy with which DSK had been associated.
This article appears in the July 1, 2011 edition of National Journal Daily PM Update.