WASHINGTON — The International Monetary Fund says its embattled managing director, Dominique Strauss-Kahn, intends to resign, effective immediately, as he faces sexual assault charges in New York.
The IMF’s executive board released a letter from the French executive late Wednesday in which he denied the allegations lodged against him but said that with “great sadness” he felt compelled to resign. He said that he was thinking of his family and that he wanted to protect the IMF.
Strauss-Kahn, once considered a leading contender to win the French presidency next year, has denied charges that he attacked a 32-year-old hotel maid Saturday.
He faces a bail hearing today.
Acting head John Lipsky, the first deputy managing director at the IMF, was serving as acting managing director while Strauss-Kahn was out of Washington, in accordance with standard IMF practice.
Strauss-Kahn’s arrest cast a shadow over a meeting of European finance chiefs in Brussels, who Monday endorsed a $111 billion aid package for Portugal, the third euro-area country to receive a bailout, after Greece and Ireland.
European officials are working to prevent the region’s first default as Greek ministers plead for terms to be relaxed on 110 billion euros of aid from the IMF and European Union.
“It’s certainly, in these negotiations with Europe, very hard to replace him,” said David Dodge, a former governor of the Bank of Canada. “He understands so deeply and profoundly the European political and economic situation. I don’t think there’s anyone at the fund who would come close to having that.”
Strauss-Kahn was chosen in 2007 to a five-year IMF term in keeping with an informal agreement under which a European heads the IMF while an American leads the World Bank.
Strauss-Kahn, who succeeded Spain’s Rodrigo Rato, helped reshape the agency’s mission and restore its relevance. When he arrived, its emergency lending dropped to $58.7 million in 2006 from $66.4 billion in 2002. Among his first moves there was to cut about 400 jobs.
Bloomberg News contributed to this report.
