Strauss-Kahn Saga Exposes Flaws in Europe’s Greek Debt-Crisis Management

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http://www.bloomberg.com/news/2011-07-10/strauss-kahn-saga-exposes-flaws-in-europe-s-greek-debt-crisis-management.html

Greece’s budget was unraveling, Germany and the European Central Bank were at odds over the fix, revelations of secret meetings and cover-ups were sapping confidence in Europe’s crisis management -- and then came the encounter between Dominique Strauss-Kahn and the maid.

Strauss-Kahn’s May 14 arrest on charges of sexual assault left a void atop the International Monetary Fund, busting the one thing that had gone consistently right in the handling of the euro-area debt crisis: cooperation between European leaders and the Washington-based IMF. The fund’s contribution to Greece’s next loan was no longer a sure thing, said two European officials with direct knowledge of the talks who declined to be identified because the deliberations were private.

Confusion over the IMF share was part of a catalogue of missteps and miscommunication by Europe’s political elite that has scarred their effort to prevent Greece from slipping into the financial abyss. With Athens clinging to a lifeline opposed by taxpayers in Germany and Finland, the margin of error is narrowing and the crisis shows no sign of ebbing as it heads toward year three.

“It’s now not just a Greek, Irish or Portuguese problem: it’s a euroland problem,” said William Rhodes, a senior adviser to Citigroup Inc. whose new book “Banker to the World” recounts three decades of work on debt restructurings. “What’s happening in Europe has been hit and miss from one day to the next and the real danger down the road is contagion. All this squabbling spooked the markets, which now move in nanoseconds.”





***i believe someone had posted an article that DSK was pro greek default.