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Strauss-Kahn arrest casts shadow over eurozone meeting | Strauss-Kahn arrest casts shadow over eurozone meeting |
(40 minutes later) | |
The arrest of IMF boss Dominique Strauss-Kahn in New York, on charges of the sexual assault of a hotel maid, is overshadowing a meeting of eurozone financial leaders. | The arrest of IMF boss Dominique Strauss-Kahn in New York, on charges of the sexual assault of a hotel maid, is overshadowing a meeting of eurozone financial leaders. |
He had been due to attend a meeting in Brussels to discuss additional help for Greece's debt-hit economy. | He had been due to attend a meeting in Brussels to discuss additional help for Greece's debt-hit economy. |
Issues up for discussion include what conditions to apply to any more financial bail-outs for the country. | Issues up for discussion include what conditions to apply to any more financial bail-outs for the country. |
A 78bn euro (£68bn; $110bn) bail-out for Portugal may also be approved. | A 78bn euro (£68bn; $110bn) bail-out for Portugal may also be approved. |
And the meeting will also check the latest progress of the Irish Republic in dealing with its debt crisis. | And the meeting will also check the latest progress of the Irish Republic in dealing with its debt crisis. |
'Significant role' | 'Significant role' |
Analysts were worried about the absence Mr Strauss-Kahn's absence from the meeting. | Analysts were worried about the absence Mr Strauss-Kahn's absence from the meeting. |
"The leadership vacuum at the IMF comes at a highly inopportune time for Europe, which is teetering on the brink of a full-blown debt crisis," said Eswar Prasad, a professor of international economics at Cornell University and a former IMF official. | "The leadership vacuum at the IMF comes at a highly inopportune time for Europe, which is teetering on the brink of a full-blown debt crisis," said Eswar Prasad, a professor of international economics at Cornell University and a former IMF official. |
Lucinda Creighton, the Irish Republic minister for Europe, told broadcaster RTE that Mr Strauss-Kahn was "somebody who has had a significant role in the events of recent months in relation to the Irish bail-out". | Lucinda Creighton, the Irish Republic minister for Europe, told broadcaster RTE that Mr Strauss-Kahn was "somebody who has had a significant role in the events of recent months in relation to the Irish bail-out". |
However, she added: "But it is not unusual for the head of the IMF to be absent from a meeting like this and I don't think it'll really have any impact." | However, she added: "But it is not unusual for the head of the IMF to be absent from a meeting like this and I don't think it'll really have any impact." |
Default fears | Default fears |
The eurozone meeting is expected to discuss the situation in Greece, and whether the country will need additional help to deal with its debts. | The eurozone meeting is expected to discuss the situation in Greece, and whether the country will need additional help to deal with its debts. |
Some European leaders are unhappy at what they perceive as limited Greek efforts to raise money by selling government property. | |
At a sensitive moment for the eurozone crisis, Dominique Strauss-Kahn will be badly missed. | At a sensitive moment for the eurozone crisis, Dominique Strauss-Kahn will be badly missed. |
He was intimately involved in the detail of the bail-outs for Greece, the Republic of Ireland and Portugal. | He was intimately involved in the detail of the bail-outs for Greece, the Republic of Ireland and Portugal. |
He personally handled many of the negotiations and micro-managed some of the terms and conditions. | He personally handled many of the negotiations and micro-managed some of the terms and conditions. |
As a former French finance minister, he personally knew most of the key leaders and officials managing the crisis. | As a former French finance minister, he personally knew most of the key leaders and officials managing the crisis. |
He passionately believed in the survival of the euro and, under him, the IMF was fully committed to finding a way out of Europe's debt crisis. | He passionately believed in the survival of the euro and, under him, the IMF was fully committed to finding a way out of Europe's debt crisis. |
Although his deputy John Lipsky was the case officer for the bail-outs, he is unlikely to be such an influential figure. | Although his deputy John Lipsky was the case officer for the bail-outs, he is unlikely to be such an influential figure. |
If and when Mr Strauss-Kahn is replaced, the leadership of the IMF may well not go to a European, and officials in Brussels are already anxious about this. | If and when Mr Strauss-Kahn is replaced, the leadership of the IMF may well not go to a European, and officials in Brussels are already anxious about this. |
Debt-strapped Greece was bailed out a year ago by the EU and IMF to the tune of 110bn euros ($157bn; £93bn) euros. | Debt-strapped Greece was bailed out a year ago by the EU and IMF to the tune of 110bn euros ($157bn; £93bn) euros. |
Since then it has imposed a series of financial cuts and austerity measures to try to balance its books. | Since then it has imposed a series of financial cuts and austerity measures to try to balance its books. |
On Friday, EU Economic and Monetary Affairs Commissioner Olli Rehn said Greece must take additional steps to consolidate public finances because it was missing its deficit reduction targets. | On Friday, EU Economic and Monetary Affairs Commissioner Olli Rehn said Greece must take additional steps to consolidate public finances because it was missing its deficit reduction targets. |
The country has a 327bn euros debt pile, or nearly 150% of its economic output. | The country has a 327bn euros debt pile, or nearly 150% of its economic output. |
Germany provided a large chunk of the Greek bail-out cash and wants to see stringent conditions applied before backing any new aid. | Germany provided a large chunk of the Greek bail-out cash and wants to see stringent conditions applied before backing any new aid. |
European Central Bank governing council member Ewald Nowotny told German business daily Handelsblatt that Greece may be entitled to receive further loans. | European Central Bank governing council member Ewald Nowotny told German business daily Handelsblatt that Greece may be entitled to receive further loans. |
"But you have to grant them under very strict conditions," he added. | "But you have to grant them under very strict conditions," he added. |
Many analysts believe that Greece's financial troubles are so deep that a Greek default on its debts appears inevitable. | Many analysts believe that Greece's financial troubles are so deep that a Greek default on its debts appears inevitable. |
"The policy response [to the debt crisis] continues to be ad hoc, behind the curve," RBS chief European economist Jacques Cailloux said. | "The policy response [to the debt crisis] continues to be ad hoc, behind the curve," RBS chief European economist Jacques Cailloux said. |
However, the European Central Bank appears determined to prevent any default as such a move could undermine the euro. | However, the European Central Bank appears determined to prevent any default as such a move could undermine the euro. |
The euro fell to a seven-week low against the dollar and a two-month low against the yen before the meeting. | The euro fell to a seven-week low against the dollar and a two-month low against the yen before the meeting. |