IMF hands reins to French official Strauss-Kahn

WASHINGTON -- The International Monetary Fund chose France's Dominique Strauss-Kahn as its new leader Friday at a time when the institution's relevance in rapidly changing times has been questioned.

The fund's 24 executive directors said they selected Strauss-Kahn, a former Socialist finance minister, by consensus, that is without a vote.

Strauss-Kahn, 58, will replace Spain's Rodrigo de Rato on Nov. 1 and will serve a five-year term as managing director.

The French official said he is "determined to pursue without delay the reforms needed for the IMF to make financial stability serve the international community, while fostering growth and employment."

De Rato, who announced in June that he was stepping down for personal reasons, pledged to work with Strauss-Kahn "to ensure a smooth transition."

Strauss-Kahn became the odds-on favorite for the job after securing the support of the United States and the 27-nation European Union. The other candidate was Josef Tosovsky, a former Czech prime minister and central banker, nominated by Russia.

Strauss-Kahn said his candidacy derived legitimacy "from the very broad support I received, notably from emerging market and low-income countries," many of which he visited in the past few weeks as he campaigned for the post.

Strauss-Kahn has to begin charting a new course for the 185-nation organization that has been trying to give countries with fast-developing economies a greater role in IMF decisions.

In addition, IMF member countries no longer are borrowing as often as they did, so funds for operations are down, staff cuts are imminent and the agency may have to sell gold reserves to make ends meet.

Countries with fast-developing economies with access to international capital markets, such as China and Brazil, no longer need the IMF, but it still runs lending programs for poor countries, many of them in Africa.

Strauss-Kahn told the board last week, "It will be a hard task for all of us to rebuild the relevance and legitimacy of the organization, but I am prepared to do that, and I ask you to be prepared as well."