BRICs slam European grip on IMF, Lagarde leads race

Brazil, Russia, India, China and South Africa, known as the BRICs, sharply criticized European officials on Tuesday for suggesting the next International Monetary Fund head should automatically be a European.

In the first joint statement issued by their directors at the Fund, the BRICs said the choice should be based on competence, not nationality, and called for abandoning the obsolete unwritten convention that requires that the head of the IMF be necessarily from Europe.

French Finance Minister Christine Lagarde plans to announce her candidacy on Wednesday after the European Union agreed to back her, diplomatic sources said.

Hours before the BRIC statement was issued in Washington, France's government said China would back Lagarde to succeed Strauss-Kahn who quit after he was charged with sexually assaulting a hotel maid in New York.

Emerging nations say it is time for Europe's 65-year grip on the IMF to be loosened but no clear consensus candidate to represent them has emerged.

Mexico's top central banker said some countries welcomed his decision to run, while South Africa and Kazakhstan may put forward their own candidates.

'EUROPEAN CONSENSUS'

Following Strauss-Kahn's resignation, Europe has made clear it wants to stay in charge of the multilateral lender at a time when it is helping to bail out Greece, Ireland and Portugal.

It's a European consensus, Francois Baroin, France's budget minister and government spokesman, told Europe 1 radio.

The euro needs our attention. We need to have the Europeans (on board), the Chinese support the candidacy of Christine Lagarde, he said.

But China's Foreign Ministry said it had no comment on whether Beijing would back Lagarde, a 55-year-old former lawyer, for the job.

Sources in Washington have said the United States would back a European, continuing a tradition that also allows an American to run the World Bank.

The United States and European nations jointly have power at the IMF to decide who leads it but securing support from some emerging economies would defuse a potentially bitter row over the decision.

In April 2009, the Group of 20 leading nations endorsed an open, transparent and merit-based selection process for heads of the global institutions.

France, which presides over the G20 this year, has made an effort to reach out to Beijing on key issues for developing countries like global monetary reform and speculation in commodity markets.

Last week, the head of China's central bank, Zhou Xiaochuan, said the IMF's leadership should reflect the growing stature of emerging economies. But he stopped short of saying its new boss should be from an emerging economy.

Wu Qing, a researcher with the Development Research Center government think tank in Beijing, said it was plausible that China would support Lagarde as there weren't many qualified candidates from China or Asia in general.

The IMF's board will draw up a shortlist of three candidates and has a June 30 deadline for picking a successor.

'PART OF THE PROCESS'

Emerging economies say a backroom deal under which Europe maintains its grip on the IMF and an American heads the World Bank could undermine the legitimacy of the institutions.

Mexico's Carstens told Reuters the United States welcomed his participation in the race for the IMF job but was neutral on whether to support his candidacy.

They welcomed that I was participating and they thought it was an important part of the process, Carstens said.

Brazil seemed reluctant to back Carstens, with government sources saying he is seen as a long shot for the job.

South African Finance Minister Trevor Manuel may also be a candidate to run the IMF, and Russia has said it would back Kazakhstan's central bank chief, Grigory Marchenko.

A growing concern about Lagarde is a possible legal probe of her role in a 2008 payout to a prominent French businessman to settle a dispute with a state-owned bank.

Judges are due to rule on June 10 -- the deadline for when countries must submit candidates for the IMF job -- whether to launch an inquiry into the matter.

Strauss-Kahn, who is under house arrest in New York, denies the sexual assault charges and his wife has stood by him.

A law enforcement source said DNA found on the maid's shirt was a match to Strauss-Kahn. The source also said Strauss-Kahn made advances toward another employee at the same Sofitel hotel a day before the alleged attack.

The accuser is a 32-year-old widow who hails from rural Guinea. A man who says he is her brother spoke of a quiet woman who left the village after her husband died.

(She) never created any problems for this family, he told Reuters. She was the quiet one. That's how she was brought up.

The maid's lawyer, Jeff Shapiro, told Reuters the woman had been scared about losing her job if she complained about the alleged attack to police.

If you need a paycheck in order to pay your rent and support your daughter, it's not so easy to do that. Does your employer really want to have all these problems? he said.