Germany kicks off battle for IMF chief

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Germany on Monday kicked off the battle to find a new head for the International Monetary Fund (IMF) after incumbent Dominique Strauss-Kahn was arrested on charges of attempted rape.

Chancellor Angela Merkel told reporters Strauss-Kahn should be considered innocent until proven otherwise, but immediately raised the possibility of his departure by saying that, given the current euro crisis, his successor should be a European.

"It's important not to voice any suppositions of guilt", Merkel said after the 62-year-old former French minister was arrested at the weekend in New York on charges of attempting to rape a maid at the hotel where he was staying.

Strauss-Kahn has denied the charges.

"We know that in the medium-term emerging countries will have a good claim to the chairmanship of the IMF and World Bank," but "in the current situation, there are good reasons to say that Europe has good candidates" to take over as head of the IMF should Strauss-Kahn step down, she added.

"Europe doesn't have a right to the director's chair, that's obvious. But in the current situation when the IMF is especially needed to fight the crisis in some euro states, the German government sees good reasons why there should be a good European candidate" to take over from Strauss-Kahn, Merkel's spokesman Steffen Seibert had earlier told the press.

Should Strauss-Kahn resign "Germany would make this clear to its international partners," he added.

In the meantime, Berlin expects "the IMF to continue to play its role to the full," Seibert said.

Belgium's Finance Minister Didier Reynders also publicly argued that the top IMF job should go to a European should Dominique Strauss-Kahn resign.

"It is preferable that Europe keeps its place at the heart of the IMF," Reynders said Monday.

"There is for the moment an equilibrium between the United States, with the World Bank, and Europe, at the Fund," he added.

Since its creation in 1944, the IMF has always been headed by a European, while the World Bank has been chaired by an American.

Emerging economies however have started to challenge such a division of labour.

"At present it's not the most dynamic economies which are in control," according to Sylvain Broyer, economist at Natixis, who suggested the time might have come to let them take the lead.

The IMF has opened up its senior ranks to representatives from emerging economies, but Germany, Europe's leading economy, obviously feels the time is not yet right to relinquish control.

This does not mean however that Germany wants to push its own candidate.

Berlin "had its own IMF chief not so long ago," said Broyer, referring to Horst Koehler who managed the international organisation from 2000 to 2004 before going on to become president of Germany.

Therefore Berlin "does not have the best cards for getting the job," Broyer added.

Germany also appears to have taken a back seat in the selection of the president of the European Central Bank, a post for which it did not put forward a candidate.

The job was expected to go to Mario Draghi, the current Italian central bank chief, after Merkel, following months of dithering, last week backed him to replace departing ECB chief Jean-Claude Trichet of France.

© 2011 AFP

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