Greek Bailout Money Is In Jeopardy As The IMF's Departing John Lipsky, Former JPM Chief Economist, Is In Temporary Command

Tyler Durden's picture

It turns out that the meeting that DSK was rushing to (in just a bit of a rush, without his cell phone), was a critical one for the future of Greece. Per the AP: "The arrest of IMF chief Dominique Strauss-Kahn means a key participant
will be missing at a European meeting considering whether to give Greece
billions more in financial help
." Does this mean that all Greek bailout talk is put on hold? As a result the headless (no pun intended) IMF is forced to promote its second in command, John Lipsky, previously chief economist of JP Morgan, to the rank of acting managing director, even as "separately, spokeswoman Caroline Atkinson said the fund remains fully functioning and operational despite the arrest of the fund's chief executive." What is funny is that it was just yesterday that Lipsky announced he was stepping down in August. What happens to the world's pseudo-bailout organization come September, when its top two officers are gone, is anyone's guess.

From AP:

Strauss-Kahn was to hold talks Sunday with German Chancellor Angela Merkel and join European finance ministers on Monday in Brussels. That won't be happening since he was arrested in New York City this weekend on suspicion of sexual assault on a hotel maid.

Ministers from the 17 countries that use the common euro currency are talking about whether they have to give Greece more help in paying its debts. Greece already received a euro110 billion ($157 billion) bailout package from the European Union and the IMF last year.

The International Monetary Fund says it "remains fully functional" despite the arrest.

And from Dow Jones:

John Lipsky is currently acting managing director of the International Monetary Fund, as the current head, Dominique Strauss-Kahn, is in police custody in New York following his arrest on attempted rape charges, a fund official said Sunday.

Separately, spokeswoman Caroline Atkinson said the fund remains fully functioning and operational despite the arrest of the fund's chief executive.

Lipsky, technically the first deputy managing director, was effectively put in the role when the fund chief went to New York on private business, the first official said.

The fund said early Sunday morning by email that Strauss-Kahn had retained his own private lawyer to deal with the case.

"The IMF has no comment on the case; all inquiries will be referred to his personal lawyer and to the local authorities," spokeswoman Caroline Atkinson said.