IMF Rudderless As Europe Burns

NEW YORK — The sexual assault charges against Dominique Strauss-Kahn, the head of the International Monetary Fund, have cast uncertainty over global efforts to prevent Europe’s debt crisis from spinning out of control and raise questions about the future of one of the world’s most powerful financial institutions.

At the Washington-based IMF, which makes emergency loans to struggling economies, Strauss-Kahn has been a muscular advocate for aiding Greece, Ireland and Portugal as they have fought to avoid insolvency. A default by a developed European economy would shock the global financial markets and endanger the nascent economic recovery in the United States.

The IMF on Sunday named Strauss-Kahn’s second-in-command, former banker John Lipsky, as his replacement. But Lipsky was planning to step down at the end of the summer, and while a European has long led the IMF, countries such as China and India are considering nominating one of their own for the top spot. That could also have wide ramifications for the organization, whose emerging market members have complained that it shows more generous treatment toward European countries than those in the developing world.

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