Dominique Strauss-Kahn's downfall comes at an opportune time for the French right and extreme right.

The arrest of International Monetary Fund chief Dominique Strauss-Kahn on attempted rape and assault charges in New York on Saturday had the effect of a bombshell in France. Mr. Strauss-Kahn was widely expected to resign his post at the IMF and run for the French presidential poll in 2012. His arrest put an end to a brilliant career as an economist and a politician.

“I am stunned. This news is like a thunderbolt coming from the blue,” Socialist Party general secretary Martine Aubry said, calling on her party to respect the principle of the presumption of innocence and to unite in the face of adversity. Many on the French left suggested Mr. Strauss-Kahn could have been framed or could have fallen for a honey trap.

‘Dishonour to France'

If Mr. Strauss Kahn's arrest has dealt a body blow to the Socialist Party, it has the French Right wringing its hands in glee. Bernard Debray, MP from the ruling UMP party, showed no qualms about running down Mr. Strauss-Kahn. “He is not a respectable person. He has sex on his mind. This incident brings dishonour to France,” Dr. Debray, an eminent surgeon, said.

The French presidential palace put out a quiet statement saying Mr. Strauss-Kahn was innocent until proven guilty. The extreme right National Front leader, Marine Le Pen, said that Mr. Strauss-Kahn had “forfeited his right to lead the French people.” She said this was not the first time the IMF chief was caught “womanising.” For all accounts and purposes “Mr. Strauss Kahn is finished. His political career is over,” Ms Le Pen said.

Mr. Strauss-Kahn's downfall comes at an opportune time for the French right and extreme right. Never has President Nicolas Sarkozy been so low in the polls and never has the extreme right, anti-immigrant and anti-Islamic National Front ridden so high. Dominique Strauss Kahn was the only politician who would have been acceptable to France's centre-right.

His image was that of a market friendly social democrat and he was capable of stealing the centrist vote from President Sarkozy while carrying along sizeable sections of the French left. The sudden end to his political career has left the socialists in disarray with a huge hole which is likely to be filled by several presidential hopefuls, none of whom has the charisma, the brilliance or the pragmatic efficiency that Mr. Strauss-Kahn displayed.

In recent weeks his political rivals, including the right wing press in France, repeatedly attacked him for his flamboyant lifestyle — tailor-made suits at $32,000 apiece, a luxurious villa in Marrakesh, Morocco, and a four-million-dollar flat in Paris' coveted Places des Voges bought for hard cash, not counting his sumptuous five bedroom house in Washington — dubbing him the epitome of what the French working classes derisively and somewhat enviously refer to as the “Caviar Left.” But much of Mr. Strauss-Kahn's wealth comes from his third wife, Anne Sinclair, a New-York born journalist who is said to own several major works of art.

Socialists in disarray

The French Socialist Party is not the only institution to find itself in disarray. The question on everyone's lips is: who will be the next chief of the IMF and what will be the future of the reforms Mr. Strauss-Kahn initiated?

The global economy is suffering its worst ever downturn since the Great Depression and Mr. Strauss-Kahn's downfall could not have come at a worse time for not just countries like Greece, Spain or Portugal but also for the reform of the Bretton Woods institutions themselves.

Mr. Strauss-Kahn had hesitantly begun steering the IMF towards more openness to emerging economies and his avowed aim was to end the total domination of Europe and America over the IMF and the World Bank. Traditionally, the World Bank chief is American while the IMF is headed by an European. Mr. Strauss-Kahn is the fourth Frenchman to be elected IMF chief since the Bretton Woods institutions were created in 1944.

The Guardian newspaper in an assessment of Mr. Strauss Kahn wrote: “When he arrived in the autumn of 2007, the fund suffered from three big problems: it had been ideologically wedded to the free-market philosophy of financial liberalisation that caused the world's banking system to implode, it had suffered from weak leadership and it was short of money.

“Strauss-Kahn highlighted the need to focus on employment and accepted that countries facing speculative pressure were justified in using capital controls to defend themselves, an anathema during the high pomp of neo-liberalism, dubbed the Washington consensus.”

However, in the Guardian's view, the reforms introduced by Mr. Strauss-Kahn were timid at best and “it is questionable whether the willingness to intervene to smooth out the global imbalances between creditor and debtor nations is more than skin deep.”

No guarantee

And now is no guarantee the Fund will continue to follow the trajectory on which Mr. Strauss-Kahn set it when he took over as chief. It is being hinted that one of the subjects he wished to discuss with Angela Merkel during his aborted meeting with the German Chancellor on Sunday evening was his possible successor, since the IMF chief was expected to announce his resignation from the Fund by July. Ms Merkel had also asked for Mr. Strauss-Kahn's analysis and reading of the situation in Greece, Ireland, Portugal and Spain. The German Finance Ministry is waiting to finalise its conclusions on Greece once the troika of the IMF, the European Central Bank and the European Commission have published the findings of their current ongoing review of the Greek rescue programme.

The importance of the German position on the bailout packages is of great significance since most other European Union nations take their cues from the EU's strongest and most healthy economy. Germany will want to have a say in the nomination of the next IMF chief.

It is unlikely that Mr. Strauss-Kahn will be relieved of his functions in the IMF immediately. In his absence the Fund has named the second in command John Lipsky to officiate at the upcoming meetings. But it is likely that he too will resign by the end of August. He has, however, agreed to stay on in the role of special adviser until after the G20 meetings in November.

High-profile candidates

Several high-profile candidates are already available in Europe, including Britain's former Prime Minister Gordon Brown, who is highly regarded in various European capitals. However, his candidature is likely to be shot down by none other than Prime Minister David Cameron who said on record that the next IMF chief should be from “India, China, or Southeast Asia since the organisation needs someone who understands the dangers of excessive spending.”

Emerging nations have resented the amount of money the Fund has given in bailout packages to ailing European economies and these countries could insist on a western-trained economist from their own ranks being named the next chief, thus breaking the West's stranglehold on the IMF and the World Bank

One of the persons tipped to succeed Mr. Strauss-Kahn is Montek Singh Ahluwalia. Other names include Mohamed A El-Erian, the American-born son of an Egyptian diplomat and an economist who leads the giant bond investor Pimco, and Arminio Fraga and Guillermo Ortiz, former heads of the central banks of Brazil and Mexico respectively.

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