OTTAWA - Canada has played an active role in discussions that could lead to the resignation of embattled World Bank president Paul Wolfowitz in a matter of hours or days, Finance Minister Jim Flaherty said Wednesday.
Responding to news that Wolfowitz was negotiating the terms of his resignation from the international lending institution, Flaherty said late Wednesday afternoon: "I'm not surprised at the discussions that are taking place right now in Washington.''
"There were concerns about the issue of whether he could continue as an effective leader of the World Bank, and we've been actively involved in the discussions and I hope they come to a conclusion that will work well for Mr. Wolfowitz and the bank today.''
Earlier in the day, Flaherty had denied reports from Washington that Canada has abandoned its neutral position on World Bank president and had sided with European nations seeking his resignation or removal.
But he also declined several times to offer support for Wolfowitz, a controversial ally of President George W. Bush who was an architect of the war in Iraq and whose position at the international lending institution came under attack after he secured a pay raise and promotion for his girlfriend.
And with a majority of employees at the Washington-based bank supporting his ouster, Flaherty conceded that Wolfowitz may no longer have the capacity to be effective in his job.
"That's one of the issues being discussed right now, that is, the effectiveness or ineffectiveness of his leadership going forward,'' Flaherty said. "That's one of the issues being raised in the report and is a subject of active discussion now in Washington.''
One Canadian official told The Canadian Press that regardless of the merits of the accusations against Wolfowitz, "it's looking like he's got to go.''
Support for Wolfowitz, never strong outside of the Bush White House, has been deteriorating for weeks. The final straw may been the report last week of a seven-member panel that found he had acted unethically and had breached the bank's internal rules.
Over the last two days, voices calling for his resignation have become louder and less equivocal.
"There's no doubt that the panel's report is very damaging to Paul Wolfowitz,'' Denmark development minister Ulla Tornaes said in a news report. "It's difficult to see how he can continue.''
Heidemarie Wieczorek-Zeul, Germany's development minister, reissued a request that Wolfowitz step down, saying: "He would do the bank and himself a great service if he resigned.''
She went on to say that Wolfowitz would not be welcome at an Africa forum the bank is holding in Berlin next week.
Even the U.S. appeared to be softening its support Wednesday, with White House press secretary Tony Snow saying that although Wolfowitz's actions were not a firing offence, "all options are on the table.''
Flaherty said Canada's position was made more complicated because its seat on the bank's board also represents Ireland and several Caribbean countries.
