GWEN IFILL: An arrest in New York that is sending jolts throughout the world economy and the politics of France.
Dominique Strauss-Kahn was being escorted into court before dawn in New York today. He was supposed to be in Brussels at a crucial meeting on European debt.
MAN: This defendant is charged with criminal sexual acts in the first degree...
GWEN IFILL: But the director of the International Monetary Fund, looking haggard and unshaven, appeared instead before a New York State judge in Lower Manhattan, charged with sexual assault.
JOHN MCCONNELL, New York County: One count of attempted rape in the first degree, which is a Class C violent felony, one count of sexual abuse in the first degree, which is a D violent felony.
GWEN IFILL: It all stemmed from an alleged encounter on Saturday afternoon in a $3,000-a-night suite at the Hotel Sofitel in Times Square. A 32-year-old chambermaid alleged that Strauss-Kahn came out of the bathroom naked and forced himself on her repeatedly. He was arrested later that day, taken off an Air France flight minutes before it departed for Paris.
Today, Defense Attorney Benjamin Brafman argued for his client's release on $1 million bail.
BENJAMIN BRAFMAN, attorney for Dominique Strauss-Kahn: I also would add, for the benefit the defendant, that he denies these charge, that he is presumed innocent under the law, something which I didn't hear at all coming from the people's position, and he is presumed innocent. And, indeed, this is a very defensible case.
GWEN IFILL: But, before a packed courtroom, Judge Melissa Jackson agreed with prosecutors that Strauss-Kahn, a French national with considerable resources, is a flight risk.
JUDGE MELISSA JACKSON, Manhattan Criminal Court: All right, this court is going to remand the defendant to grand jury action.
GWEN IFILL: She ordered him held in custody until a further hearing this Friday. Strauss-Kahn had acknowledged adulterous behavior in the past, earning a nickname in the French media, "The Seducer."
But his arrest on rape charges sent shockwaves through the global financial community. He's led the IMF for nearly four years, as the agency provided billions in emergency financing to Greece, Ireland and Portugal.
He was to have met today with German Chancellor Angela Merkel, whose nation is providing additional financing. In Berlin, Merkel was asked about the politically sensitive topic of replacing Strauss-Kahn.
ANGELA MERKEL, German chancellor (through translator): Emerging countries certainly have a claim to the post of IMF chief, as well as the post of the head of the World Bank, but I think that in the current phase in which we have a lot of discussions connected to the euro, there are good reasons for Europe also to have good candidates available.
But I repeat it again -- and I would ask you to note this -- this question doesn't arise today.
GWEN IFILL: For now, the IMF has named an acting director, American banker John Lipsky. And in Greece, which is still counting on additional IMF help, there were mixed emotions about Strauss-Kahn's fate.
GIORGOS DEDOUSSIS, Greece (through translator): If an entire country is hinged on Strauss-Kahn, it's a pity for Greece and all of us.
NIKOS ANTHOPOULOS, Greece (through translator): I think Strauss-Kahn is a simple worker. Someone else will take his place.
GWEN IFILL: Strauss-Kahn's arrest also scrambled the presidential field in France, where he had been a top Socialist Party contender to face incumbent President Nicolas Sarkozy next year.
A Socialist Party spokesman urged caution.
BENOIT HAMON, French Socialist Party (through translator): We currently have very partial information, incomplete and with contradictory versions. In such a climate of incertitude, we Socialists have to hold fast to our principles. And the first of them is to repeat that Dominique Strauss-Kahn is presumed innocent.
GWEN IFILL: But adding to his troubles today, a 31-year-old French novelist claimed Strauss-Kahn assaulted her nine years ago.