The resignation, while providing clarity to an organization reeling from the accusations facing its managing director, immediately sets off a scramble about who will lead the powerful organization and what that will mean for the global economy.
Under Strauss-Kahn, the Washington-based IMF has taken a muscular approach toward fixing Europe’s financial woes, advocating financial bailouts for ailing nations such as Greece and Portugal. Without Strauss-Kahn at the helm, Europe is at risk of losing a key source of financial support in its efforts to contain the debt crisis buffeting the continent.
The resignation — emanating from a jail cell on Riker’s Island, where Strauss-Kahn has spent three nights while he fights to be released on bail — also marks one of the most extraordinary falls from power in recent years. Until the recent accusations, Strauss-Kahn was considered a leading contender to challenge French president Nicholas Sarkozy in next year’s election.
The resignation comes four days after Strauss-Kahn was removed from a Paris-bound plane in New York and arrested on charges of attempted rape. He is accused of sexually assaulting a housekeeper at the lavish Sofitel hotel in Midtown Manhattan.
His departure from the fund came after he faced pressure to resign from Treasury Secretary Timothy F. Geithner and other economic officials around the world.
John Lipsky, an American banker who serves as the first deputy managing director at the IMF, is temporarily overseeing the organization until it finds a new managing director.
In his letter — his first statement since the allegations — Strauss-Kahn wrote that he denies “with the greatest possible firmness all of the allegations that have been made against me” and wants to devote his time “to proving my innocence.”
The news of Strauss-Kahn’s resignation comes after his offer Wednesday to submit to electronic monitoring of his movements and 24-hour-a-day house arrest at his daughter’s apartment in New York in an effort to end his confinement at Rikers Island jail while awaiting trial. In addition to offering a $1 million cash bail, the embattled IMF chief proposed the electronic monitoring and “home detention” in a plea for release filed by his attorneys in New York Supreme Court on Wednesday.
A hearing has been set for Thursday afternoon, and in a statement Strauss-Kahn’s attorneys said they were confident their high-profile client would be released.
The documents filed with the court “proposed conditions that should satisfy any concerns about Mr. Strauss-Kahn’s leaving the city. . . . We hope to have him released from Rikers Island promptly,” lawyers William W. Taylor III and Benjamin Brafman said in a statement.
In an initial bail hearing after Strauss-Kahn’s Saturday arrest, New York prosecutors maintained that his wealth and prominence made him a flight risk. The judge agreed, noting that he was taken off an Air France plane waiting to leave for Europe when he was arrested.