US Treasury chief calls on IMF to replace DSK

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US Treasury chief calls on IMF to replace DSK

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The media frenzy continues to swirl around Dominique Strauss-Kahn. The pressure has mounted to such an extent that the Secretary of the US Treasury now says the IMF should appoint an interim chief to replace the 62-year-old Frenchman.

“He is obviously no longer in a position to run the IMF and I think it is important that the board of the IMF formally put in place for an interim period somebody to act as Managing Director.” Timothy Geithner told New York’s Harvard Club on Tuesday.

It is the first time a top official from the Obama administration has spoken publicly about the impact of Dominique Strauss-Kahn’s arrest, on a string of sex charges which he denies.

IMF Deputy Director John Lipsky stepped into the breach after his boss was arrested last weekend.

But some think a European might not be the best person to oversee a global economy increasingly driven by emerging powers in Asia and Latin America.

“We would really hope to see a change, in the sense that the next person should be selected on merit and that the Europeans should realise that while they are the biggest shareholders, they are also the biggest debtors now so they no longer have the right to nominate that person.” said Daniel Gros, from the Centre for European Policy Studies.

Dominique Strauss-Kahn was crucial in helping galvanise Europe to tackle its debt crisis, particularly in the face of divided elite opinion over huge bailouts for struggling states like Greece, Ireland and Portugal.

But developing countries have said they will challenge the status quo by which the IMF stewardship goes to a European, while an American heads the World Bank.