Quest Means Business Top Ten:  Number One, Dominique Strauss-Kahn; Number Four, Economic Halloween
RICHARD QUEST, HOST: Come on in, hello, welcome! Yes, come on! This is the QUEST MEANS BUSSINESS studio, and it's a different program tonight as we look back at some of the best moments in 2013. I'm Richard Quest, and I mean business. Good evening. Over the next hour, we're going to bring you the Top Ten moments from 2013. Now, on this program, we think it's really important we bring you the biggest names in economics, finance, and business. And with this in mind, we were really pleased to have as a guest Dominique Strauss-Kahn, the former managing director of the IMF, who fell from grace spectacularly over a sex scandal in New York. I met Mr. Strauss-Kahn in Paris, and in a wide-ranging interview, we talked about whether or not European leaders had botched the recovery in the way they'd handled the Great Recession. It was, without doubt, number one.</s>DOMINIQUE STRAUSS-KAHN, FORMER MANAGING EDITOR, IMF: Frankly, everybody knows in the business side that when you have a loss, you have to take it and start again. What the Europeans tried to do was to buy time for political reasons. Not to admit the losses. So they were unable -- still now they are unable to have a plan for the future. They're just trying to buy another six months and another six months. And that's a catastrophe because the cost today is much higher than the cost which would have been the cost two or three years ago.</s>QUEST: And when you see the way they put together the original Cyprus bailing in ordinary depositors?</s>STRAUSS-KAHN: Very good example. Cyprus is another disaster, as if history had given no lessons. How can you expect that the Cyprus economy, which is such a small economy, will start again when you're just squeezing all the companies, all the firms, keeping all their money out?</s>QUEST: So, let's be blunt about this. Is this a case of Germany --</s>STRAUSS-KAHN: Well --</s>QUEST: -- pushing austerity or the hard-liners -- you're a socialist. So, is it case of the hard-liners on the right pushing austerity to the absence of anything else?</s>STRAUSS-KAHN: No. It's not a question of Germany. You have pro- austerity and pro-growth in both countries, in France and Germany, and in other countries, too. The problem is that it's not -- the problem is not a question of austerity or not. It has been too much austerity, I agree with this. And if I were a Greek man, I probably would be demonstrating in the street as others. But the question is not -- this is not the main question. The question is that more or less austerity, but the economists called the policy mix between fiscal policy and monetary policy is not the point. The main point is competitiveness, and arguing that you need to have less deficit or more deficit, less debt or more debt, is an interesting problem, but it's not the main problem. The main problem is that Europe is not competitive anymore.</s>QUEST: So what has to happen to make Europe competitive?</s>STRAUSS-KAHN: Well, you have to work on competitiveness. The history is too long to be saved today. But countries like France, like the UK, like Germany also, have lived for a century or more on the fact that they keep the technology for themselves -- leave the rest of the world. That's over.</s>QUEST: But today's --</s>STRAUSS-KAHN: So, you have to rebuild the competitiveness.</s>QUEST: -- today's leaders are not up to the task.</s>STRAUSS-KAHN: Well, I think most of them don't really understand what globalization is. They have been educated, trained, they had their political life in one country and only one country, and they don't realize that Europe is not that big. It's a small part of the world. And the problem is to solve the European problem in the globalization, not against the globalization.</s>QUEST: They're not up to it. Come on! Come on, Dominique. If we -- we're talking here about a situation where four or five years -- nearly six years after the crisis began and Europe is still in recession, with high unemployment.</s>STRAUSS-KAHN: Well, if you -- if you want me to tell you that there is a crisis of leadership, I will tell you, there is. You know, some erratic saying, which is that an army of lions led by sheep will always be defeated by an army of sheep led by a lion. And that's exactly what we are: sheep.</s>QUEST: We were lions being led by sheep?</s>STRAUSS-KAHN: I'm afraid that --</s>QUEST: The Commission's not up to it.</s>STRAUSS-KAHN: Some -- you can't be that general. Some leaders in Europe are perfectly up-to-date and know what they'll have to do. But mostly, the European system is built in a way that no decision is made, no hard decision can be made.</s>QUEST: There's no easy way to ask any of these questions --</s>STRAUSS-KAHN: There's no easy way to answer.</s>QUEST: Fine. So, I'm just going to ask it straight out. What were you thinking that day in New York?</s>STRAUSS-KAHN: Frankly, I don't remember exactly. It depends if you're talking that day before the events --</s>QUEST: Before the events.</s>STRAUSS-KAHN: -- or after the events.</s>QUEST: Before the events, what led you to the events.</s>STRAUSS-KAHN: I wasn't thinking anything. It happened -- something happened, which is a private thing, and I still say what happens in a room is a private thing unless the prosecutors find something to tell you that you are going to be charged with something and they have proof of that. And when prosecutors, after having charged you, tells, OK, finally, we don't have charge enough to charge you, then it means that it's a private thing and nobody has to say anything about it.</s>QUEST: Why did you settle the case against her? Why did you pay her money?</s>STRAUSS-KAHN: That's very simple. The US is a very special system. In my country, in most European countries, when on the penal side, people say there's nothing, then you cannot be sued on the civil side. In the US, you can. So, the prosecutor may say we have nothing against you, but still you may have a civil trial. And I was ready to go to trial, but my lawyers told me, OK, it's going to take four years and it will cost you much more in legal fees than you have to pay even if you win, so you'd better pay her off.</s>QUEST: Paid her off.</s>STRAUSS-KAHN: And I decided to settle and go on with my life.</s>QUEST: Do you give any credence to the conspiracy theorists? That -- was it secret services, the missing BlackBerry, whatever it might be, all these things. Do you give any credence to the fact that you were set up?</s>STRAUSS-KAHN: Credence? Maybe. Proof? No. So, I'd better say nothing.</s>QUEST: So, you do give some credence?</s>QUEST: One of the most controversial aspects of this besides your behavior was, of course, the famous perp walk.</s>STRAUSS-KAHN: Yes.</s>QUEST: You were brandished in front -- this made huge noise in France. How do you now view the perp walk?</s>STRAUSS-KAHN: I think it's a terrible thing, frankly, but only because it's difficult to live. Many things are difficult to live with. You have to do. The problem is, that it's a moment where, in all European, American society, you're supposed to be innocent. You're supposed to be innocent until you're convicted. And the perp walk takes place at the moment where you're supposed to be innocent. And so what happens, you're just shown to everybody as if you were a criminal at the moment where nobody knows if it's true or not. Maybe you're a criminal, maybe you're not, and it will be proved later on. And so, it's just unfair to put people in that way in front of the rest of the world when you just don't know what they have done.</s>QUEST: Did you feel that at the time?</s>STRAUSS-KAHN: Well, I was angry. Because at this moment, I didn't understand what was going on, I didn't understand why I was there. I was just understanding that something was going on that I didn't control.</s>QUEST: The problem with all the allegations about you, sir, whether it be the Sofitel incident or, indeed, the young lady in France or, indeed, the parties libertine soirees, as they're now known. The problem is that none of them -- underneath them all, there's an element of behavior that is not expected of men or women of high office.</s>STRAUSS-KAHN: I agree. I agree. So, I made this mistake to believe that you could have a public life, doing what you had to do in the public life -- and nobody ever said against me something in the public life -- and that you can have your private life. And my mistake was certainly to believe that you can have these two things together without any connection between. I was wrong. It was wrong in the way you say because people are not expecting this kind of -- a paradox, behavior from somebody having a public responsibility.</s>QUEST: Were you an accident waiting to happen?</s>STRAUSS-KAHN: No, I won't say -- I won't say that. I had in mind that I had my private life, that I could do what I want as long as nobody was hurt or some legal problem appeared, but without any kind of legal problem, I could do what I want as everybody can do what he wants, and that I would be judged on my public service just on what I do in the public. Again, it was the wrong thing. I understand now that you cannot disentangle the two in that way.</s>QUEST: As one reads about you and the -- let's face it, there's mountains out there now. You must've read just -- I don't know whether you read much --</s>STRAUSS-KAHN: Not that much.</s>QUEST: Not much, right. But everyone says you have an -- you have a problem with women. Dominique Strauss-Kahn clearly had a problem with women in his attitude to them, the way he behaves towards them, the way he views them as sexual objects.</s>STRAUSS-KAHN: No. I don't think so. I don't think so. I don't think I have any kind of problem with women. I firmly have a problem with understanding that what is expected from a politician of the highest level is different from what can do Mr. Smith in the street.</s>QUEST: That's the price of being at the top?</s>STRAUSS-KAHN: Exactly. And I didn't want to pay this price, so finally, I paid it twice.</s>QUEST: You said that you had missed your rendez-vous with the French people, I believe was the --</s>STRAUSS-KAHN: True.</s>QUEST: -- was the phrase. You were going to be a presidential candidate. Was it a case of au revoir or adieu? In other words, are you going to come back again? Everybody wants to know. It's really a basic question, this, isn't it? Do you have aspirations to be president of France?</s>STRAUSS-KAHN: No. No.</s>QUEST: Is that a politician's no, a never, maybe, or perhaps?</s>STRAUSS-KAHN: It's a no. I'm not working in the whole world -- around the world for governments, some in developed countries, some in the developed countries, developing countries. They ask me for advice, I'm happy to help. Sometimes I make some money, and I need some money to live. Sometimes I don't make some money and I do it for free just because I want to help. And I like it. So, this -- problem of French politics is behind me.</s>QUEST: An electric interview with Dominique Strauss-Kahn. From a former managing director of the IMF to the current president of the World Bank. We continue our climb up the Top Ten after the break.