NEWS

Greece watches as Strauss-Kahn resigns from IMF

Dominique Strauss-Kahn, the managing director of the International Monetary Fund who was instrumental in Greece becoming the first eurozone country to receive a bailout, has resigned as head of the Washington-based organization in order to contest claims of sexual assault.

?It is with infinite sadness that I feel compelled today to present to the Executive Board my resignation from my post of managing director of the I.M.F.,? he said in a statement issued Wednesday, shortly after midnight, by the I.M.F. ?I think at this time first of my wife ? whom I love more than anything ? of my children, of my family, of my friends.?

His resignation comes four days after Strauss-Kahn was taken off an Air France plane at Kennedy International Airport and arrested in connection with the accusations, and a day after Timothy Geithner, the US Treasury Secretary, called for his resignation.

?I want to say that I deny with the greatest possible firmness all of the allegations that have been made against me,? added Strauss-Kahn in his statement.

John Lipsky, an American, is the IMF?s acting head but the organization will have to pick a permanent managing director soon. Greece will be watching closely as the new chief will have a major role in deciding whether Athens should restructure its debt or if it should receive more loans.

Officially, the 24-member executive board votes to fill the top post, with votes weighted based on member countries’ and region’s subscription quotas.

But traditionally it has been negotiated based on a pact that gives the United States a hold on the World Bank’s top job and Europe the IMF position.

Some European leaders have already called for another European to be named, with French finance minister Christine Lagarde and former German central banker Axel Weber mentioned as possible candidates.

In recent years, however, shifts that have given rising economies greater quotas, and dissatisfaction with the IMF’s approach to many crisis-struck countries, have sparked pressure for a broader-based pool of candidates.

The popular shortlist from emerging economies includes Turkish former UN official Kemal Dervis, Indian planner and IMF veteran Montek Singh Ahluwalia, and Mexican central banker Agustin Carstens.

If it comes down to a board vote, the quota system favors the old economic powers: the United States has 16.80 percent of the vote; Japan 6.25 percent; Germany 5.83 percent; and Britain and France each have 4.3 percent.

As blocs, the G7 major economies hold 44.3 percent of voting rights, while emerging market and developing countries have 40.5 percent, based on March 2 IMF figures.

The Greek government has not officially commented on Strauss-Kahn?s arrest but following his arrest, Athens sought to stress that it would continue to work closely with the IMF regardless of whether the Frenchman is in charge.

?The Greek government deals with institutions, not individuals, and continues unimpeded to implement the program that will get it out of the crisis,? said government spokesman Giorgos Petalotis.