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What does France think about DSK’s release?

After weeks of soul-searching about gender, politics, lusty old men, and sexual violence, France woke to the news today that the New York City rape case against Dominique Strauss-Kahn, the former IMF managing director and one-time front-runner to take Nicolas Sarkozy's seat, was near collapsing since prosecutors no longer believe much of the accuser's story. And just now, he's been released from house arrest.

How do you say oops in French?

WHAT KIND OF RECEPTION WILL HE RECEIVE WHEN HE RETURNS?

Some will certainly embrace Strauss-Kahn as a martyr (like his friend and stalwart defender, Bernard Henri-Levy) on the cross of the U.S. justice system, but some in France seem less willing to give him a hero's welcome. The charges in New York led to other allegations against the former IMF leader that made him out to be -- at the very least -- a cad.

"Even if what he did was not criminal, all this is going to take time," Christophe Barbier, a political commentator and editor of L'Express weekly, told Reuters. "There is everything we have learned about him, the damage to his reputation. All this makes the idea he could be a candidate very hypothetical, it's science fiction."

As one French woman told the Times:  

"People are not going to forgive him. At a political level, he is dead," she said. "It would be terrible for France if he came and if we give him some credit again."

TIME TO RETHINK THE PERP WALK?

Initially, many in France expressed anger at DSK's treatment, whether or not he was guilty as charged. The infamous "perp walk," in which he was hauled out in handcuffs, looking disheveled before cameras -- something alien to the French justice system -- made the whole thing seem if not barbaric than certainly less genteel.

Doesn't this new revelation simply confirm those stereotypes about the American justice system? The New York Times got mixed reactions:

In several conversations there seemed to be little rancor toward the American justice system, beyond a broad sense that it was, as one French legal adviser put it, "muscular." But Patrice Randé, 50, the manager of an insurance office, said the case risked stoking anti-American feeling with the impression that the New York police had deliberately humiliated Mr. Strauss-Kahn. "We were made to believe he was guilty, we dropped him, we really bought this," Mr. Randé said. "I'm shocked that they didn't take more care," he said, referring to American prosecutors.

SO, WILL HE ENTER THE FRENCH PRESIDENTIAL RACE?

Before his arrest, Strauss-Kahn was leading in the polls to win the Socialist Party's nomination and many thought he could ultimately unseat Nicolas Sarkozy. Already, there are segments of the party that are suggesting Strauss-Kahn could return to the race -- even though the field is already crowded with other contenders.

One party  leader, Jean-Marie Le Guen, said his old ally, DSK, would now "be present in the presidential campaign," though he also said it was too soon to speculate on whether he would run. 

Socialist Michele Sabban said the party should postpone the primary calendar, in light of the news. (The current deadline to declare one's candidacy is July 13).

Jean-Louis Borloo, a potential Socialist candidate for president, seemed to endorse a DSK run on French TV. "What's stopping him from coming back if he has the strength and desire?" he asked.

The head of the Socialist Party, Martine Aubry, who announced this week she was running for president, said she hoped "the American justice system will establish the whole truth and allow Dominique to emerge from this nightmare," though she steered clear of questions about his political future.

One politician who doesn't seem likely to embrace DSK any time soon is leader of the far right National Front, Marine Le Pen. "I don't see how he can come back as a candidate in the Socialist primaries, no matter what happens," she said. Of course, this might have more to do with her own political fortunes. Analysts said she benefitted more than Sarkozy when Strauss-Kahn left the race.

And one unnamed senior Socialist told the New York Times the party shouldn't react too quickly.

"What if we all embrace him again and then he turns out to be guilty after all? We have to wait for a clear and definite outcome before making any decisions," he said. "Our voters have lost trust not just in him but the party. We have to be careful."

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You call Greece a crisis? Try the U.S., says China

A day after the Greek parliament passed another round of austerity cuts to stave off the country's financial ruin, the third quarter economic outlook report released yesterday by the Bank of China is more worried about the situation in the U.S.:

The U.S. sovereign debt problem is more hazardous than the European debt crisis, economists from Bank of China Ltd. said Thursday in the bank's third quarter economic outlook, predicting that the U.S. sovereign debt risk will continue to intensify in the next few years.

U.S. public debt stood at around 65% of the country's nominal gross domestic product in the first quarter, exceeding the "safety line" of 60%, according to the report by one of China's big four banks. The U.S. still hasn't come up with any effective solutions, and the possibility that it will face a sovereign debt crisis is increasing, it added.

The op-ed page of state-owned outlet China Daily contains a similar message:

... The debt crisis in Europe and uncertainty in Japan could mean that there will be no strong alternatives to dollar assets, so it has a great chance that the US might walk away from its debts and, at the same time, borrow more money from other countries.

Chinese officials have expressed concerns about the possibility of a U.S. default before. Earlier this month, an adviser to the People's Bank of China (China's central bank; the Bank of China is one of China's four major state-owned commercial banks) said that Congressional Republicans floating the idea of a default were "playing with fire." Of course, it's no secret that China is the largest single holder of U.S. debt, with $1.15 trillion's worth of Treasury bonds in their coffers. But statistics from London-based bank Standard Chartered suggest that the Treasury buying binge may be over.

Meanwhile, other revelations from today about China's role in the U.S.'s looming budget fiasco cast China's recent worries in an amusing light. A Reuters article  suggests that, up to 2009, China was buying up more U.S. debt than previously disclosed by circumventing Treasury debt auction rules. Essentially, China would run its deals through third-party brokers to disguise that its purchases were exceeding the cap set on purchases by single parties at individual auctions. A change in the debt auction rules in 2009 closed the loophole, and Treasury appears to have made disguise the change as a "modernization of auction rules," so as not to trouble relations with China.

Those were the days, eh?

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