Thu, May 19, 2011 - Page 1 News List

Strauss-Kahn facing growing pressure to quit

TIME TO GO:In the US, politicians questioned the viability of the IMF head’s tenure at the institution that is charged with looking after the world economy

Reuters, NEW YORK and WASHINGTON

Dominique Strauss-Kahn faced growing pressure to quit as head of the IMF after his arrest on attempted rape charges as Europe sought to fend off a challenge from developing countries to fill a post it has traditionally held.

China, Brazil and South Africa questioned Europe’s right to the job, but Europeans said it made sense for them to retain the post while the IMF plays such a crucial role in helping to ease the eurozone debt crisis.

Strauss-Kahn is expected to remain in New York’s Rikers Island jail, known for its gang violence, at least until his next appearance in court tomorrow, when his lawyers may again request bail. He was denied bail on Monday.

It could be six months before a trial begins, legal experts said, which could severely impair his ability to run the fund.

The IMF said it had not been in touch with Strauss-Kahn since his arrest, but it would be important to do so “in due course.” Two IMF sources said the board would ask Strauss-Kahn whether he planned to continue in his post.

One source said it would be ideal if Strauss-Kahn resigned, but the second said that sentiment was not shared across the 24-member board, which has the authority to remove him.

Strauss-Kahn is accused of trying to rape a maid who came to clean his luxury suite at the Sofitel Hotel in Manhattan on Saturday. His lawyer has said he will plead not guilty. If convicted, he could face 25 years in prison.

In the US, the IMF’s biggest shareholder, politicians began questioning the viability of his tenure as head of the institution charged with managing the world economy and central to negotiating debt crisis deals.

“I can’t comment on the case, but he is obviously not in a position to run the IMF,” US Secretary of the Treasury Timothy Geithner said.

John Lipsky, the second-in-command, is in charge during Strauss-Kahn’s absence, but no formal interim chief has been named. IMF sources said that David Lipton, the White House international economic adviser and a former deputy treasury secretary, would take Lipsky’s deputy position.

Strauss-Kahn’s arrest has thrown the IMF into turmoil just as it is helping eurozone states such as Greece and Portugal tackle debt woes.

US Senate Foreign Relations Committee Chairman John Kerry stopped short of calling for Strauss-Kahn’s resignation, but he called the circumstances of the case “troubling, if not damning.”

“If the evidence is what it appears to be, I think it would be very difficult for him to manage,” Kerry said.

In Europe, Strauss-Kahn was also losing support.

“Given the situation, that bail has been denied, he has to consider that he would otherwise do damage to the institution,” Austrian Finance Minister Maria Fekter said.

Spanish Economy Minister Elena Salgado cast doubt on Strauss-Kahn’s judgment, but said it was his decision whether to resign.

“That is a decision which is up to Mr Strauss-Kahn to take, but the crimes he is accused of are very serious ... My solidarity first and foremost is with the woman who suffered the attack, if that was what happened,” she told reporters.

A European has held the post of managing director since the IMF was created in 1945, and four of them have been French.

However, emerging countries are starting to flex their muscle over who should succeed him.

China said on Tuesday the selection of the next IMF boss should be based on “fairness, transparency and merit.”

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