April 14 (Bloomberg) -- World Bank President Paul Wolfowitz's hold on his job weakened as the U.K. and Germany declined to join the U.S. in backing him.

Wolfowitz has ``damaged the bank,'' Hilary Benn, the U.K. development secretary, said today. His German counterpart, Heidemarie Wieczorek-Zeul, said he must ``decide for himself whether he can continue to fulfill his duties credibly.''

World Bank directors are weighing Wolfowitz's future as head of the largest development organization after finding that he personally dictated the terms of his partner's pay increase and promotion. Germany and the U.K. are among the bank's biggest shareholders after the U.S., which picks the president. A French minister yesterday also refrained from backing Wolfowitz.

The controversy is overshadowing the semiannual gathering in Washington of the nations that are stakeholders in the World Bank, which lends $23 billion a year on programs to raise literacy, fight disease and clean up the environment.

In contrast to their European counterparts, African finance ministers offered support for Wolfowitz and praised his battle against poverty on the continent, where 300 million people live on less than $1 a day.

Advocate for Africa

``He certainly championed our cause over the last two years of his leadership, and we look forward to it continuing,'' said Antoinette Sayeh, Liberia's finance minister.

World Bank spokeswoman Amy Stilwell today said Wolfowitz wouldn't comment.

U.S. Treasury Secretary Henry Paulson yesterday told reporters that he had ``a very high regard for Paul Wolfowitz,'' describing him as a ``very dedicated public servant.''

Benn, Wieczorek-Zeul and French Finance Minister Thierry Breton refrained from praising Wolfowitz, the former U.S. deputy defense secretary who was nominated by President George W. Bush in 2005. Breton, asked yesterday if he had confidence in Wolfowitz, said: ``I have confidence in the bank.''

Other ministers, including Canadian Finance Minister Jim Flaherty, have said the bank board's investigation should be allowed to run its course. The board yesterday promised a speedy decision.

``I believe in a fair process here,'' said Flaherty. ``I don't believe in running up and ganging up on anybody.''

Bush still backs Wolfowitz and expects him to remain in charge, White House spokeswoman Dana Perino told reporters yesterday.

War Role

Wolfowitz was already unpopular in France and Germany because of his role as architect of the war in Iraq. He raised hackles among staff members over plans to beef up the bank's presence in Baghdad, and his drive to fight corruption among the bank's borrowers prompted concern that aid intended to help the poor might be halted.

Wolfowitz apologized this week for granting a raise to his partner, Shaha Riza, an eight-year bank veteran who worked as a communications officer. To comply with bank rules that forbid one partner to report to another, she was transferred to the State Department while remaining on the bank payroll.

The staffer, Shaha Riza, said she has been ``victimized'' for accepting a deal to transfer out of the bank. The 52-year- old U.K. citizen commented in a letter to board members released yesterday.

Wolfowitz sent a memo to the bank's personnel manager ``directing him to reach an agreement with the staff member and specifying in detail the terms and conditions,'' the directors' statement said.

Pay Increase

Riza was given a 36 percent raise that the Staff Association, which represents 13,000 employees, says is twice as large as bank rules allow.

Wolfowitz told the group's human resources director to lift Riza's salary to $180,000, with further guaranteed increases of about 8 percent a year, according to a memo released by the board. At the end of Wolfowitz's five-year term, she was to be offered a promotion to the level of director, with a further promotion to vice president should Wolfowitz stay longer.

After her first annual raise, Riza earned $193,590 in her State Department job, free of income taxes because she isn't a U.S. citizen. The raises were justified by the disruption to Riza's World Bank career that would be caused by her transfer, according to the memo.

`Full Responsibility'

Wolfowitz depicted his decision to promote Riza as a good- faith effort to carry out recommendations of the board's ethics committee. Still, ``I take full responsibility for the details,'' he said this week, and appealed for understanding of a ``painful personal dilemma.''

Riza, in her memo to the board, said she never wanted to leave the bank. She described the ``professional, physical and psychological damage'' she had suffered and said the people who had leaked details of the arrangement should be held responsible for violating confidentiality rules.

Nancy Birdsall, who runs the Washington-based Center for Global Development and is a former director of policy research at the bank, said on her Web log that Wolfowitz should quit because he ``has become a distraction not a leader at a moment when leadership is sorely needed.''

To contact the reporters on this story: William McQuillen in Washington at bmcquillen@bloomberg.net; Christopher Swann in Washington at cswann1@bloomberg.net

Last Updated: April 14, 2007 16:49 EDT