Jailed IMF chief faces pressure to quit

City A.M. Reporter
Dominique Strauss-Kahn is under growing pressure from European officials to quit as head of the International Monetary Fund after spending his first night in a notorious New York jail yesterday.

With the IMF in turmoil following the arrest of its managing director on criminal charges including attempted rape, China and Brazil challenged Europe's grip on the Fund's top job.

In France, many Socialist leaders voiced outrage at the way Strauss-Kahn, a front runner for the French presidency, had been paraded handcuffed and unshaven by U.S. police before he has had a chance to defend himself in court.

But two European finance ministers questioned the viability of Strauss-Kahn's continued leadership of an institution that is central to efforts to steady the world economy.

Asked whether the Frenchman should quit, Austrian finance minister Maria Fekter said after a European Union meeting: "Given the situation, that bail has been denied, he has to consider that he would otherwise do damage to the institution."

Spanish economy minister Elena Salgado cast doubt on Strauss-Kahn's judgment.

"It's important to ensure the stability of institutions, but we also must trust Mr Strauss-Khan to use his best judgment. In this case at least, although in other cases, he does not seem to have done so," she told Spanish radio.

Salgado told reporters in Brussels it was up to Strauss-Kahn to decide whether he should quit "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."

Strauss-Kahn was arrested aboard an Air France plane on Saturday and charged with a sexual assault on a chambermaid at a luxury Manhattan hotel. He denies the accusations.

A judge denied him bail on Monday, remanding him to the city's grim Rikers Island jail, where he spent the night.

In a significant move, China said today that the selection of the next IMF boss should be based on "fairness, transparency and merit."

China last year become the third-largest member country in the IMF, after the United States and Japan and leapfrogging European countries.

China's foreign ministry declined to comment on the charges against Strauss-Kahn.