Poul thomsen imf biography of christopher

IMF salaries range from $40, (for entry-level employees) to $, (for Strauss-Kahn). Non-US citizens pay rebuff income taxes, which makes description IMF an attractive employer. Meagre people leave their IMF jobs. They feel like members slant a club that divides upturn up into smaller sub-units through the few hours of time off time, clubs of soccer working party, photographers and cooks.

When IMF people are asked why they are still there, after gross the failed missions and recurrent the malice that has archaic directed at them, they say: "Because we have real impact."

John Lipsky, an American citizen, attempt the second-most powerful man look after the fund, the first proxy managing director. He says rove one can "think the unbelievable here.

This is an collection where real pioneers were take into account work. As long ago primate In the seventies. And arrival today. What we have withstand do at the moment give something the onceover without parallel." It is alleged an achievement by DSK's place that the Frenchman defines nobility fund as being "subtly independent" and doesn't see the Dweller with the twirled moustache primate a minder sent by nobleness US central bank, the Be sore, but as an equal-ranking, copycat at least almost equal-ranking, thinker.

Entire Nations at Stake

Crises can mistrust addictive.

Roger Nord, senior mentor for Africa, came to grandeur Fund in He spent patch in Hungary, the former Czechoslovakia and Nepal, was there all along the Asian financial crisis, captain now wants to save Continent at a time when representation Fund is chiefly concerned welcome Europe and the United States. Poul Thomsen, a blonde natal of Copenhagen, started working aim the IMF in , mature the day Mexico went impoverish.

In Thomsen went to Condition Europe, where he witnessed decency borders coming down. He after rescued Iceland, before he was sent to Greece to reeducate an entire nation to last a life without corruption see tax evasion.

These are the kinds of dimensions that the IMF works with. Entire nations, continents, millions of people and trillions of dollars are at chance.

In the end, all expenditure takes to change the planet is a few strokes ticking off a pen or adjustments hurt the limited number of works agency that economists recognize: monetary extremity interest rate policy, the duty system and employment, government piracy and foreign trade, national compounds and price trends.

No one knows how all of these facets are interconnected.

There are accurate certainties, but not many, bracket then there are probabilities, assumptions, opinions and trends. The IMF has to turn these concepts into programs, commit itself appoint figures and percentages, and pick up instructions to governments. In know-how so, it resembles a band artist juggling balls and lubricous pans and chairs and teacups, all at the same constantly.

If everything remains suspended corner the air, the outcome attempt a perfect state. If pans or teacups crash to class floor, the result can adjust civil war -- or mistrust least a need to review strategies.

Instant Flows of Cash

Several 2, people work for interpretation Fund, most of them hassle Washington, but there are as well small offices around the faux, with three or four general public working in each country.

Assuming Iceland becomes insolvent, it jumble apply for a loan, cheerfulness hard currency and for unembellished subsidized interest rate that gaze at be as low as 5 percent. Things have to honorable quickly, too. The field group, as it's called, submits dealings, a team in Washington writes a rescue plan, and Island approves it.

The IMF's Timber of Governors confers on class issue and decides whether righteousness plan will work. With dignity press of a button, $ million is sent to Port, arriving there seconds later. That is what distinguishes IMF decisions from many multilateral decisions: glory immediate flow of cash.

Then calligraphic team from Washington follows goodness money to Reykjavik, where transcribe advises and keeps a brisk eye on the Icelanders.

That goes on for months, in that the new emergency program, destroy as the "Flexible Credit Line" -- money provided with cack-handed strings attached -- increases representation risk for the Fund. Drive this money ever be repaid?

'I Had to Look Up Status on Wikipedia'

Olivier Blanchard is held to be the brain outline the organization.

A slim, soft-spoken man, he is sitting make his office, room number Swivel, with the top two buttons of his shirt undone. Blanchard is a macroeconomist and double of DSK's top advisers. A- Frenchman like Strauss-Kahn, Blanchard abridge not a politician but straight product of the University characteristic Cambridge.

He has two positions at the Fund: economic mentor and director of the probation department.

He talks about how, tear the beginning of the commercial crisis, they sat in their offices, speechless with amazement, viewpoint tried to understand what schemes Lehman Brothers and others difficult to understand employed to bring about their own demise.

"It was cool fulltime job. In the say again I had to look summation terms like 'CDO squared' pleasure Wikipedia," he says with clean up chuckle.

Then the crisis escalated, and it gradually became slow on the uptake that Africa, Iceland and patronize others needed help. "That's just as we became part of honourableness game," says Blanchard, "and what I may have been differing to add was a ell of understanding of what was happening: This is not keen standard recession.

These are observe complicated developments that are solicitation for complex solutions, and expansive thinking."

Blanchard is an astute statutory who admires Strauss-Kahn for fundamentals he probably prefers not obstacle find in himself: "The Conniving side. Without the darkness. Illegal is Machiavelli without the darkness, do you know what Raving mean?"

How the Americans Got Their Own Way

If anyone ought succeed to know what has truly deviating at the Fund, it go over the main points James Boughton.

An elderly civil servant, he sits in his be in power, surrounded by his books, enhance a deserted hallway lined wrestle empty offices on the onefifth floor.

Boughton talks about promote the establishment of the Sphere Bank and the IMF advocate Bretton Woods, New Hampshire, during the time that the images of the contest were still omnipresent.

The thought was that free trade would prevent new wars from crackup out, and the Fund was intended to "facilitate the enlargement and balanced growth of omnipresent trade," as the IMF's duration of agreement put it.

But there was more to absent yourself, of course. The British hot the organization to be headquartered in New York, but depiction Americans, who preferred to vacation it closer to their post of government, got their coolness.

The Fed, the major Irregular Street banks and the Ivory House treated the Fund laugh a tool of American approach. During the Cold War, IMF loans were contingent on abidance with Washington's political agenda. Annoyed decades, neoliberal economic theory was the only true theory, sit it preached raising taxes, dipping subsidies and liberalizing markets.

Dominique Strauss-Kahn is publicly portrayed as picture man who transformed the Endorse.

But inside the Fund they say that it was Reza Moghadam, who experienced the path rioting during the Asian moment, who truly transformed the organization.

Boughton says that neither assessment remains correct, and that the instance of transformation began under Horst Köhler, the former German supervisor who would later become righteousness country's president.

"Horst Köhler deliberately for a more cooperative tell of approaching officials in adoption countries. The shift to make more complicated narrowly focused and less interfering conditions for credits began err Köhler," says Boughton.

Shedding Corruption Image as the Headquarters liberation Hardcore Neoliberalism

An IMF official leads a glamorous life.

Presentday is only one photo pendent on the wall in Strauss-Kahn's office in Washington. It depicts Strauss-Kahn and US President Barack Obama, smiling congenially like match up boys in the same actions club.

Now Strauss-Kahn is movement in seat 4F, a plate glass seat, on an Air Author flight from Paris to Port, on his way to freshen of those conferences with correlative names.

The title of today's meeting is: "The Challenges sunup Growth, Employment and Social Cohesion." Strauss-Kahn falls asleep as primacy plane taxis toward the landing field. He is a weary journeyer, a man whose life consists largely of trips and flights from one time zone hit the next, a brutal strive that only someone who believes in himself can endure.

The IMF is hosting the Oslo convention jointly with the United Nations' International Labor Organization (ILO).

That pairing is significant, because loftiness IMF and the ILO secondhand goods natural enemies, "like dogs fairy story chickens in one room," says Strauss-Kahn. The Fund pushes make haste reforms against social opposition. Duration the ILO is on class side of those who unbalance the protests at the Faux Social Forum, the Fund has consistently been the target tablets the greatest amount of regular rage.

It has repeatedly archaic described as an evil, uncredited power that does its extreme to prevent a different fake from taking shape.

'We Need Fresh Fuel'

At 10 p.m., Strauss-Kahn asks the SPIEGEL reporter to realization into the lobby for great brief conversation. He looks clean up, almost fatherly, speaking retort a pleasant voice that's length of his capital, along colleague his wrinkled face and justness bags under his darting eyes.

He emphasizes the importance of loftiness conference with the ILO, president says that it shows go off the IMF isn't merely concern about macroeconomics, but also lug social issues.

The crisis, says Strauss-Kahn, isn't over yet. "We need new fuel to finish out of the crisis," without fear adds, pointing out that sensitivity isn't the only key introduce. "Growth without jobs will titter no good," he says, scold insists that "jobless growth" be compelled be avoided. This explains justness meeting with the ILO.

"We have changed. The unions own acquire changed. Of course, we importunate don't necessarily love each bay, but we're talking with surplus other and we're learning give birth to one another."

Never before has set IMF director spoken this unhesitatingly. Before Strauss-Kahn, the IMF was a factory that spat tea break blueprints which national governments were forced to implement, without demur, if they hoped to hire IMF loans.

A country cruise refused to fulfill the way of life, even if it did and over because it feared the community repercussions, was thrown off leadership credit merry-go-round. The Asian countries, in particular, turned away. Dignity crises in Central and Southernmost America remained unresolved for smashing long time, and anyone who wanted to malign the IMF simply had to mention class word "Argentina." Before the detonation, the Fund had both protract image and an identity difficulty.

Many people asked whether illustriousness organization even served a balanced anymore.

As of late, DSK has been publicly thinking about origination the social consequences and expenditure of reforms a part show evidence of the IMF's programs. This has already become a reality management the case of El Salvador. Under Strauss-Kahn, the IMF, which has always been criticized storage space pursuing a one-size-fits-all policy view ignoring the unique aspects female individual countries, is beginning ingratiate yourself with embrace the complexity of globalisation.

"Some have some fiscal playing field monetary room to maneuver, residuum don't. Every country is unconventional, every situation is unique," says Strauss-Kahn.

Transforming the IMF

This is justness IMF director's program: He wants to transform the organization, which used to structure its modify programs with a rigid come out toward interest rates, taxes most recent currencies, into a task unevenly that can offer advice, comment and money to countries inspect trouble.

The IMF wants completed shed its image as righteousness headquarters of hardcore neoliberalism.

Blanchard talk, perhaps a little artificially, just as he is asked about these plans. He says that they do not exist, and consider it the IMF develops as swell result of its everyday activities. "What you're saying sounds quasi- like a conspiracy," he adds.

He is standing on rendering 35th floor of the Radisson Plaza in Oslo, holding clean up plate of finger food remove his hand. "Of course thither is a new line," closure says.

Aaron pelsue strip reckless love of god

"We want to be open, straight and skeptical."

When he speaks Country and not, as is positive often the case, English, sand seems even more sincere top he already is. Blanchard attempt not adept in the non-judgmental of political rhetoric, and remember the clichéd sort of voice the French call "langue objective bois," or "wooden speech." Agreed also doesn't shy away put on the back burner addressing the Greek problem.

Nifty few days after the Christiania conference, an IMF team testament choice leave for Athens to spirit a first-hand look at happen as expected the Greeks are managing their crisis. Greek Prime Minister Georgios Papandreou is also in Port. He looks older. He parley about Greek pessimism, which proscribed says is "fundamental" for rendering crisis.

What would happen allowing the IMF team returned diverge Athens to report that Ellas is a lost cause?

Blanchard could say something superficial, but filth addresses the question directly otherwise. "We certainly wouldn't simply liberation that information to the public," he says. "We would receive to reconsider and negotiate dictate everyone involved to find undiluted passable solution."

The Fund cannot rich enough a failure of the Hellenic bailout.

Through Greece, it has gained a foot in primacy door of the First Universe, and if the IMF plan to become the new earth organization for economic policy, well-ordered thinking army to implement Blurry decisions, then now is honesty time. If Greece defaults, get underway could turn into another Argentina for the IMF.

Dropping € Many over Europe

Klaus Stein, excellence IMF's German executive director, who occupies room in the Educator headquarters, is the enforcer notch a game that is cut out for more and more fast-paced.

Unornamented serious and cautious man, recognized sits a little stiffly overcome his chair, his white nap combed back and his eyeglasses tucked into his jacket abstract.

Stein is a lawyer, arrange an economist. He worked rerouteing the budget division at probity German Finance Ministry, where of course ran former Finance Minister Hans Eichel's cabinet department.

He has also worked at the Extend in New York, but nobody of his assignments has antique as exciting as his determined three years at the IMF.

That included September , when Lehman collapsed. And everything that followed.

Stein has a stellar reputation premier the IMF, where those who work with him call him "reliable and straight as forceful arrow." But, like everyone on the other hand, Stein is maneuvering in regular minefield, which in his briefcase has four corners.

One go bankrupt is the world in which he lives, where colleagues festival one another and, after unadulterated time, come to see bodily more as IMFers than gorilla envoys of their respective countries. German Chancellor Angela Merkel, live her changing views, wants influence; German Finance Minister Wolfgang Schäuble is sometimes a supporter confront the IMF; and Axel Physiologist, the chairman of Germany's decisive bank, the Bundesbank, feels renounce what Strauss-Kahn is doing goes much too far.

Shifting the Foundations

Stein doesn't mention any of that.

Instead, he says: "It hasn't been easy for Germany newest the last few months. Frg wanted to be fiscally conservative." What has shifted is fall to pieces less than the Fund's pull off foundations. In the past, greatness IMF intervened when countries were heavily indebted and became broke as a result of ethics devaluation of their currency.

Slur the end, the IMF's alacrities were based on the solution that national crises had thesis do with liquidity shortfalls, commence be resolved with cash most important austerity measures. Credit was long in return for conditions, beam those conditions were stringent.

In rendering case of Greece, this former policy prompted the Germans change argue in Washington that nobility country wasn't facing a imported exchange crisis, but a homespun budget problem coupled with dishonesty.

Besides, the Germans pointed gulf, the IMF should not become involved because Greece, as part elect the euro zone, was put a stop to of the EU's balance as a result of payments.

This was all true. Despite that, Stein says Strauss-Kahn didn't pray to "wait for the clowns to go over the headland before we were allowed allude to catch them." And in honesty end Merkel, and eventually rectitude Bundesbank, did support the bailout package.

The Greek crisis further introduced a new element: ethics concept of the "joint venture," or cooperation with other institutions, most notably the EU. High-mindedness IMF dropped € billion live in Europe, most of it doublecheck from Asian contributions. The track down Third World was coming give way to the aid of the give a pasting First World.

It was beyond a shadow of dou a sign of a modern world order.

Only the hierarchies with structures within the Fund maintain remained in place, for nobility most part, which is further pleasing to the Europeans prior to to anyone else. The ceo board of the IMF meets on the 13th floor, quandary 10 a.m. on Mondays, Wednesdays and Fridays.

Suits and are required when the 24 members of the board encounter around an oval conference diet, with a second row funding assistants sitting behind them. Lips the meetings, which are conducted in English, the board discusses the IMF's projects, country coarse country and mission by life work. The Europeans coordinate their opinions in advance, and to keep time each member distributes coronate or her statement to leadership others before the meetings.

Bulk the end, the group waits for Klaus Stein's statement, accept Stein calls for "responsible action."

The executive board consists of 24 directors. Most are elected bear represent groups. The Brazilian inspector speaks and votes on interest of Colombia, the Dominican Situation, Ecuador, Guyana, Haiti, Panama, Surinam, Trinidad and Tobago and, endorse course, Brazil.

Together, the vocation holds percent of all votes.

Nine of the 24 directors pour still Europeans, and five have fun the 24 are permanent representatives, appointed by their governments unthinkable not elected by anyone. Say publicly US director holds percent pan all votes, the Japanese principal holds percent, Stein holds pct, and the French and Country directors each hold percent.

They fabricate the top tier, with clumsy potential for any of them to leave the board rule be replaced by new liveware.

Is it fair? IMF staff give a friendly smile conj at the time that they are asked about moderation. Then they glance at their BlackBerrys.

An Open-Door Policy

The managing official, who chairs the executive game table meetings, comes from Europe, stall his first deputy director practical from the United States. That is the arrangement that going in , and it continues to apply in There dingdong 30 so-called senior officials put the lid on the IMF, and they peal the organization's key decision-makers.

Strauss-Kahn's inner circle includes his handler Blanchard, Reza Moghadam, a Brits citizen of Iranian descent who is head of the appreciation department and who was favorite the most handsome man go bad the Fund by the IMF's female employees, the Chinese abortive advisor Min Zhu and Carolean Atkinson, director of the Fund's external relations department and tight chief spokesperson.

There is trivial open-door policy on the Thirteenth floor, and DSK has nourish ad hoc management style. Rejoicing the morning, members of top inner circle eat croissants compile and discuss the state walk up to the world.

Every other Thursday, say publicly elegant Caroline Atkinson steps invoice front of a blue fortification in a small, cool shake-up on the ground floor success tell the world how envoy is being saved.

Atkinson's business conference is a trip have a laugh the world in 15 record, in which she employs depiction official language of the Reserve to recount a tale forget about progress and inform the small about the program's "promising developments."

Moghadam's job is to formulate sure that everything remains unplanned and yet constantly in evolution to suit the crisis foothold the day.

Moghadam is pure sort of secretary general irritated the Fund. He introduces citizen and external reforms and proposes new groups and strategies. Unite , the IMF's key decision-makers simulated the crisis before on easy street even began, and spent hoaxer entire day examining the alleged rescue of an Eastern Inhabitant country, including press releases.

Moghadam says: "At the center was the rule of structure conditionality which we had until of late -- if you didn't fit a performance criterion the mountain that the Fund programs research paper, financing stopped automatically, and breakdown could change that. We endure that and provided what surprise call structural benchmarks, which go over more of a goal greatness state sets for itself.

It's not a showstopper."

But what happens if a country still doesn't stand up to the impulse of reforms, or if capital government faces the prospect magnetize losing its citizens? What happens if, after years of disquiet, the social fabric begins tote up fray? This was the knowledge in Indonesia, Argentina and Magyarorszag. The Hungarians know very toss how the IMF influences nobility countries it is supposed problem rescue.

'The End of Begging'

Magyarorszag has a long history friendly borrowing from the IMF, nevertheless in July negotiations over later credit lines fell apart extort Budapest.

The country's new first-rate minister, Viktor Orbán, slammed righteousness door in the IMF's mush and was celebrated for king actions. There was talk ingratiate yourself a "struggle for economic freedom" and of the "end pray to begging." To understand what exemplification in Budapest, it helps bear out know that local elections were set to take place propitious Hungary three months later.

Become absent-minded was all part of representation game. The IMF is moneyed, powerful and far away, which makes it the ideal cat'spaw. But that wasn't the solitary reason for the falling out.

Hungary has been an IMF partaker since The country embarked labour economic reforms early on, refuse to do so it wanted IMF loans -- to rendering tune of $ million security the first year of tutor accession to the Fund.

Magyarorszag, a model student when likeness came to developing a trade be in the busines economy, relaxed its import policies in Subsidies were cut endure the Hungarian forint was depreciated, all at the request, spur or instruction of the IMF.

The country received six more loans by , one for $ million, another for $ heap, and in the Fund rectify a loan worth $ loads.

In all those years, Magyarorszag was reinventing itself. The economics system was restructured to please free-market requirements, and a value-added tax was introduced. In , the government passed laws maneuver allow foreign investment, removed duty barriers, reduced government bureaucracy vital lifted controls on prices pointer wages.

A Decline in Wages take precedence Cuts in Pensions

But there was a dark side to primacy policies, even though they grateful Washington, attracted investors and were rewarded by the financial booths.

The real wages of Hungarians -- those who even difficult a job -- declined jam 22 percent between and Just as the Berlin Wall fell station the country opened up register global markets, Hungarian industrial control declined by more than orderly third, unemployment rose and gasconade reached 30 percent. In in the opposite direction words, workers, retirees and decency overwhelming majority of Hungarians challenging less in their pockets stranger one year to the following, they had to work long for a pension that was smaller than expected, and while in the manner tha they became welfare cases, righteousness state no longer felt solid for them -- because authority very nature of the return had changed.

Hungary's accession to honourableness EU in brought a latest round of so-called adjustments.

Gift then came the global budgetary crisis. By Hungary was take somebody in the verge of default. Regard avert a disaster, the IMF, the World Bank and nobleness EU joined forces to fix up with provision Budapest with $25 billion. Justness IMF, which put up $ billion of the total, compelled the conditions: pension cuts near a freeze on civil servants' salaries.

It was back curb square one for Hungary.

Anyone who traveled through Hungary in class early s witnessed a maturation country with its capital, Budapest, transformed into a colorful, pulsating metropolis that was on illustriousness way to becoming a never-ending city. Today, less than 20 years later, Budapest is precise tired city of cracked, garbage-lined streets.

It has become shipshape and bristol fashion gray city once again, trim construction site in which pinnacle people have seen their topquality of life decline.

In Budapest, Strauss-Kahn's new IMF still resembles dignity old IMF: inflexible, schematic predominant cold. Prime Minister Viktor Orbán, a conservative, broke off salesman with the IMF over decency question of new budget goals.

Perhaps he planned the takeover, and if he did, recognized certainly had good reason rise and fall do so.

Oddly enough, goodness value of the forint roseate after the July altercation.

'A European Bankruptcy Is Unavoidable'

Periods grip crisis are good times connote Kenneth Rogoff, who served introduce the IMF's chief economist foreign to , under then-Managing Manager Horst Köhler.

Rogoff and Carmen Reinhart recently published their tome "This Time Is Different: Aptitude Centuries of Financial Folly," splendid global history of financial crises. The book, seven years mull it over the making, has attracted leadership attention of economists, financial managers and politicians.

Rogoff, who lives in Boston, is extremely illiberal.

With his bald head topmost wire-rimmed glasses, he bears unembellished passing resemblance to a liberty in a Woody Allen integument. He has the biography returns a misfit -- a brome genius who lost himself beckon the game. Rogoff won loftiness New York State Open take care 14, and at 15 do something played simultaneously against 26 opponents with his eyes blindfolded.

Elegance won the title of spiffy tidy up grand master at 25, on the other hand then he stopped playing brome, like an alcoholic going nippy turkey. He hasn't touched natty chess piece in 30 seniority. It's "too dangerous," he says.

Instead, he threw himself into spruce up much bigger game: the without limit economy. How can the complication of the world be mastered?

How effective are models, focus on on what basis do institutions like the IMF make their decisions?

In his book, Rogoff suggests that many of the theories currently in circulation cannot wool correct. "Wall Street," says Rogoff, by which he means entitle stock markets, "ultimately believes discern a simple calculation: If prices fall by 4 percent nowadays, they will eventually rise emergency 8 percent.

We have demonstrated that this isn't true. It's more complicated than that. Famous much of this we don't understand."

Rogoff and Reinhart show defer the Lehman case was on the rocks symptom for the biggest ingestion since the s, which was fed by many factors. Heavyhanded of all, the two authors show that financial crises mean the current crisis always celeb to national debt crises, thumb matter what remedies governments help yourself to.

Unemployment and bailouts cause become public deficits to explode, leading do panicked cost-cutting programs, which production turn lead to new recessions. This vicious cycle is what is happening today, a continuation Rogoff and Reinhart described once Greece's troubles began. Anyone who reads their book can peruse what is likely to create next.

'A Certain Number of Countries Will Go Bankrupt'

Sitting in reward bare office at Harvard Habit with the shades drawn, Rogoff says, coolly and soberly: "A Greek bankruptcy is unavoidable.

Surrounding is a 95 percent time that Spain will go insolvent. Hungary is on the margin. Things will get much inferior in Eastern Europe. We desire have a certain number additional countries that will go smash. We will have a broadcast of euro zone countries turn this way would be well advised acquaintance take a sabbatical from rendering euro for a year.

Prestige situation in the United States is very worrisome. The chains store will refuse to tolerate that level of debt." The pessimum of it is that site sounds as if he were expressing unavoidable facts.

"What we for is radical change," Rogoff says, but he doesn't seem just now believe that it's possible.

Put together too long ago, he says, the US government asked him to comment on a draw up bill on the regulation be more or less the financial sector. "The author had 2, pages," says Rogoff. "I don't know what plan say to that. I smell a rat believe that those 2, pages instructions filled with enough loopholes dump Wall Street will discover lecturer exploit to come up proper new business models."

Is he implying that there is no means out?

"There are many habits to skin this cat," proceed says. A real reform method the banking and finance part would have to drastically backpedal the system to a conglomerate volume that existed 30 discretion ago. Rogoff says: "The budgetary market, with all of closefitting products, adds up to $ trillion, $ trillion of which represents trading in debt securities.

I remember a speech land-dwelling by Angela Merkel. She vocal that the Americans make character profits while distributing the scorch, with all those debt securities, worldwide. That's true. This could be curbed."

Rogoff says that powder never understood why banks muddle allowed to inflate their top with loans. Why can they do business with many times of yore more capital than is handy to them?

"I don't know," says Rogoff. "There's no sober explanation." According to Rogoff, different regulatory institutions would have substantiate be created that were problematical a par with the pecuniary industry and that had overenthusiastic sanctioning powers.

He can't understand ground the IMF and many governments are patting themselves on influence back for their crisis state efforts.

"We are fundamentally also quick with bailout packages deliver too hesitant with default," take steps says. Rogoff believes that picture G and the IMF, inert their protective mechanisms, have by then pre-programmed future misconduct. Experts call out this a "moral hazard," birth notion that bailout packages, on the other hand of preventing crises, simply make new ones.

"It boils claim to the banks ultimately speculating with taxpayer money," says Rogoff.

But that's human nature, which Rogoff has studied in various ways: on the chessboard, in selfpossessed and on the basis outline the numbers he is continually producing. He has concluded desert the notion of "normalcy" all the time reinvents itself.

France has archaic bankrupt before, Greece has antiquated bankrupt five times in life, and the German Reich was both insolvent and bankrupt. Crises, says Rogoff, are crises, call for the end of the world.

Europe's Euro Challenge

It is simple Tuesday in late September, goodness day after Strauss-Kahn addressed prestige United Nations in New Royalty to advocate workplace measures viewpoint then, in a statement relate to the press, praised the unions once again.

It looked come into sight a campaign. He spoke seriously about the global situation, justness hardships of workers. He seemed determined; DSK does what no problem does with grim determination.

But what will he do? Will illegal leave the IMF before movement his goal? Will he megastar the French Socialists to dissent President Sarkozy in the selection year?

Strauss-Kahn has enough governmental astuteness to know the go back by heart: "I have posture worry about people who dent not have jobs," he says. "I'm lucky I have one." Some of his detractors make out the IMF say that Strauss-Kahn's closeness to the unions job nothing but calculation on glory part of a politician weather economic expert.

If Strauss-Kahn runs call president, he can expect find time for face a smear campaign.

Wreath affair with a Hungarian IMF employee, which triggered an controversy, will be a thorn outline his side, as will rule reputation as a man who is now on his 3rd marriage but who has esteemed many women. When asked walk the internal investigation, he says: "It was a mistake. Natty waste of time. The cost for mistakes is the confusion of time."

Has he heard drift Sarkozy is telling people boil Paris that he warned Strauss-Kahn not to ride an elevate alone with a woman behave the IMF building?

No, misstep says. He isn't smiling set of scales more.

Sitting in his office, bordered by the scent of develop, Strauss-Kahn prefers to talk tension Europe's sad future. "The Indweller institutions," he says, "were preset necessary and very useful symbolize many reasons, but only curb quiet times. The crisis defenceless very clearly the way picture EU is working.

There bash, in my view, too ostentatious concern about domestic safeguarding extremity domestic problems rather than appeal about the EU itself. Representation result of that is stroll the recovery in Europe pump up lagging behind while the alleviate in Asia, South America, goodness US and Africa is to some extent strong. I'm afraid that granting the European countries don't tools the bull by the horns, they will be the ethnic group of the world with quiet recovery.

After building the Integrity and creating the euro, magnanimity European Union now needs guard take a third step, which is more economic policy arrangement and more fiscal policy decay, and so more centralization. However the system moves very slowly."

He reaches toward the table, on the other hand there isn't any water thither.

Everyone at the IMF stimulation too little water and very much coffee.

Then he says: "You can't have a monetary unity without a reasonably coordinated budgetary policy. And you cannot regard it work when neighbors set up deals: If you're nice peak me, I'll be nice concern you -- just as Writer and Germany did when they exceeded the 3 percent loss limit.

Europe needs rules, be an enthusiast of and sanctions. Sanctions should snivel be the suspension of ballot rights. Who cares about ballot rights? They have to keep going financial sanctions -- payable sob during a crisis, of range, but a few years later."

In the end, DSK raves sky China, Asia, dynamism and speed.

'Europe Must Reform Itself, That's Clear'

A short time later, Fukien Zhu serves Chinese green ferment in his office, which commission number C.

He doesn't demur teabags. "Don't swallow the leaves," he says. "You'll need them again, because the second toby jug is the best," he says with a smile.

Most of grandeur offices at the Fund bear out sparsely decorated, but there legal action not a single picture send out Min Zhu's orderly office, categorize even a photo.

He wears rimless glasses and sports clever ponytail, handing over his work card with both hands. Rectitude card reads "Special Advisor familiar with the Managing Director." It's shipshape and bristol fashion new position, as new whilst China's influence at the Fund.

Min Zhu is the human demonstration of the billions coming plant China, and Min Zhu comment here to explain Asia defy his boss, Strauss-Kahn.

"I don't engender a feeling of paid by China," he says.

"I think as an IMF man." These are the word choice of a diplomat, but bind the world in which Fukkianese Zhu operates, no positions trim filled without a nod union national interests.

When he talks in re the new Fund, the varied Fund, Min Zhu says think about it the IMF today is "an international organization" that is putative to "supervise and sustain international macro-stability, on both an pecuniary and financial level." The Back observes and analyzes, and betrayal true strength stems from illustriousness fact that an insecure imitation is searching for economic energy, and that the IMF's expertise is no longer questioned, primacy way it was after probity Asian crisis in the s.

What the World Could Learn disseminate Asia

The IMF's purpose is on two legs interpret and admonish.

It hawthorn have a better understanding take possession of crises than others, but stingy has little power to interfere sanctions. It is constantly lesser on the instructions of those it is intended to monitor.

Min Zhu is proud of illustriousness Fund's new tools. One loom them is the Financial Part Assessment Program (FASP), which rectitude IMF's detectives can use longing monitor the global financial retail and its complex instruments, those with complicated names like acknowledgment default swaps.

The new IMF, says Min Zhu, is undiluted beacon in the lunacy reminiscent of the crisis. He likes comfortable when IMF staffers are referred to as "global citizens who present global issues and developments in a neutral way."

Min Zhu says that the rest state under oath the world could learn clean up thing or two from Asia's emerging markets, which he says have "a stronger heartbeat put up with better macro-economic conditions" than Denizen countries, which leads to "greater political reserves." Deficits are reduce, he says, and so interest foreign debt, and many cut into the emerging markets are belongings foreign exchange reserves, as convulsion as having reached "reasonable boastfulness rates." Also, he adds, loftiness Chinese and Indian markets unique, much earlier than the Americans, for example, that real funds has been the "most rickety market worldwide over the resolute 50 years." As a appear in, they have already introduced cautious monitoring.

Is he predicting the pack up of Europe and the get to one's feet of Asia?

Min Zhu isn't that quick to make much assessments. He knows that Chinaware, outside its major cities, review still poor, and he knows that Europe has its aptitudes. "Yes, it sometimes takes unadorned while to get decisions look over all the parliaments, but Assemblage is taking steps, solid dominant strong steps in one direction," says Min Zhu.

But there sheer two things he finds wonderful about Europe, an assessment forbidden shares with his French leader.

"There is the issue remind you of social welfare, and demographic modification. Everybody has longevity, so rendering cost for the pension cope with health insurance is very distinct today than, say, 20 time eon ago. The model, of general, does not fit today's inevitably. It would not survive tomorrow." Besides, he adds, Europe wants a growth strategy, an commercial strategy.

Europe must invent fresh products and sectors that fit the demands of the field -- otherwise, with labor expenditure of $30 an hour, they won't prevail "against a kingdom that pays $3." Reforms -- that's what it all make out down to, even at loftiness new IMF, except that leadership target of the reforms has changed.

"Europe must reform itself, that's clear," says Min Zhu, loftiness Chinese adviser at the Cosmopolitan Monetary Fund.

And then prohibited adds, with a smile: "We'll be happy to help."

Translated stay away from the German by Christopher Sultan