Europeans wary of losing IMF chair after sex scandal

"We know that in the mid-term developing countries have a right to the post of IMF chief and the post of World Bank chief. I think that in the current situation, when we have a lot of discussions about the euro, that Europe has good candidates to offer," German Chancellor Angela Merkel told reporters.

Merkel last year fought to have IMF involvement in the bailout of Greece, despite reluctance in France and southern EU states on having the Washington-based institution involved in eurozone affairs.

EU commission chief Jose Manuel Barroso also told Dutch television that if a new IMF chief is necessary, Europe should propose a candidate.

Belgian finance minister Didier Reynders said upon arrival at a eurozone ministers' meeting in Brussels on Monday - a meeting Strauss-Kahn had been scheduled to attend - that the current EU-US balance at the World Bank and the IMF should be kept intact.

Names that have been mentioned as possible successors include former German finance minister Peer Steinbrueck, Poland's central bank governor Marek Belka and French finance minister Christine Lagarde.

For his part, Luxembourg premier and eurogroup chair Jean-Claude Juncker - a long time friend of Strauss-Kahn - distanced himself from the succession debate and criticised Germany.

"As long as he has not stepped down - and I'm not suggesting he should - I don't want to comment on it. I think it's indecent that some governments already started this morning that debate. This is a debate that has no place," Juncker told a late-night press conference after the eurozone ministers' meeting.

He added that he is "deeply sad" after seeing press images of a police-escorted Strauss-Kahn.

The former French finance minister was arrested in New York on Saturday afternoon just as he was boarding a flight to Paris. A hotel maid has pressed sexual assault charges against him and the 62-year-old faces up to 25 years in prison if proven guilty.

The IMF was on Monday in Brussels represented by two deputy directors, as discussions on a potential extension of Greek loans dragged on for more than eight hours.

At the end of the meeting, Juncker said "nobody mentioned large restructuring, but I wouldn't exclude a kind of re-profiling [of the Greek debt]" - a move which may include private investors shouldering some of the burden.

"First we need new Greek measures to reach the targets we set up in the programme for 2011," Juncker added on EU-IMF demands for further privatisations and budget cuts "It's not re-profiling or nothing, it's measures measures measures and then maybe re-profiling."

Eurozone ministers also approved a €78 billion aid package for Portugal - the third euro-country in less than a year to get EU-IMF financial assistance.

They also rubber-stamped the nomination of Italian banker Mario Draghi as the successor of Jean-Claude Trichet at the helm of the European Central Bank. The decision still needs the endorsement of EU leaders at a summit in June.

Ireland, meanwhile, which is fighting to get an extension and lower interest rates for its EU-IMF loan, "had very good arguments," but there was "no time" on Monday to discuss the issues, Juncker noted.