Fallen IMF chief to stay at ‘temporary location’ in New York leading up to trial; France’s Lagarde leads race for new IMF chief while emerging nations want end to Europe’s grip on top job.
Reuters
Fallen IMF chief Dominique Strauss-Kahn left jail on Friday and was expected to be whisked to a safe house in lower Manhattan where he will be kept under armed guard and electronic monitoring.
The race to succeed him in the top job in global finance was being led by French Finance Minister Christine Lagarde. Developing countries kept up pressure on Europe and the United States not to cut a backroom deal.
Strauss-Kahn, indicted for allegedly trying to rape a New York hotel maid last Saturday, was originally expected to be taken to an apartment on New York’s wealthy Upper East Side.
The plan was changed when news of the location leaked.
“The reason that we had to move is because members of the press attempted to invade his private residence,” defense lawyer William Taylor said.
The New York District Attorney’s office said the French politician and economist would be “going to a temporary location upon his release.”
Efforts to find a location where he could stay under strict surveillance during the months of legal process leading up to his trial hit a bump on Friday.
Residents of a tony Upper East Side apartment building objected to the rental by his wife, Anne Sinclair, of two apartments for the duration out of concern about the media onslaught that has followed his case, a court official told The New York Times.
Strauss-Kahn, once seen as a possible next president of France and who played a central role in tackling the global financial crisis of 2007-09, denies the charges and has vowed to prove his innocence.
Lawyers representing him posted $1 million in bail and a $5 million insurance bond.
His resignation has triggered a contest among the world’s leading economies to come up with a replacement.
France’s Lagarde was in pole position to take over his job as many of Europe’s capitals rallied behind her.
She has been praised for her role in tackling the European debt crisis and her experience, with France this year chairing the Group of 20, in handing the often conflicting economic demands of advanced and developing economies.
The International Monetary Fund has always been run by a European.
The challenge for emerging economies to break Europe’s grip on the job got tougher when the most widely tipped potential candidate from among their ranks ruled himself out.
German Chancellor Angela Merkel all but endorsed Lagarde, telling a Berlin news conference: “Among the names mentioned for the IMF succession is French Minister Christine Lagarde, whom I rate highly.”
But diplomats said some European Union countries questioned whether the well-regarded corporate lawyer, who would be the first woman to head the IMF, could be anointed before a special court decides next month if she should be investigated in a French legal case.
Since Strauss-Kahn resigned on Wednesday, EU governments have rushed to find a European replacement before emerging nations, which have long demanded a bigger say in running the Washington-based global lender, can mount a bid for the job.
Emerging nations seek candidate
Asian, Middle Eastern and African diplomats at the IMF headquarters in Washington said emerging nations were seeking a consensus candidate.
That task was made harder when former Turkish economy minister Kemal Dervis, seen as the front-runner among potential non-European contenders, ruled himself out.
“Speculation about succession at the IMF has included me in the group of persons with relevant experience. But I have not been, and will not be, a candidate,” he said in a statement.
The New York Times reported that Dervis had an affair with a subordinate when he was a senior World Bank executive. Asked to comment, his office at the Brookings Institution in Washington said he would have no further statement.
European and U.S. officials want to move quickly to replace Strauss-Kahn but they also risk angering developing economies if they are seen to do a deal for Europe again.
Mexico sent a letter to the Group of 20 rich and emerging nations urging that the next IMF head be selected on merit, echoing calls from other emerging economies such as China whose clout in the world economy has grown in recent years.
“We are consulting broadly with the fund’s shareholders from emerging markets, as well as advanced economies,” said U.S. Treasury Secretary Timothy Geithner, stressing that the process should be open and move quickly.
“We are prepared to support a candidate with the requisite, deep experience and leadership qualities, and who can command broad support among the fund’s membership.”
The United States and European nations jointly hold more than half of the IMF’s votes, giving them enough power to decide who leads it.
Diplomats said European Council President Herman van Rompuy, who chairs summits of the 27-nation EU, and European Commission President Jose Manuel Barroso were trying to secure a deal on Lagarde after the three biggest European powers – Germany, France and Britain – threw their weight behind her.
Jean-Claude Juncker, who chairs euro zone finance ministers, and Italian Prime Minister Silvio Berlusconi endorsed her on Thursday.
“It has to be a quick decision. It would be best to have consensus before going to the G8,” one diplomat said.
