UPDATE 1-U.S. hints at support for Lagarde at IMF

Thu May 26, 2011 8:04am EDT

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(Adds Clinton quotes, China, Western diplomat)

PARIS May 26 (Reuters) - The United States gave the strongest public hint so far that it favours French Economy Minister Christine Lagarde as the next head of the International Monetary Fund.

U.S. Secretary of State Hillary Clinton told a news conference in Paris on Thursday that while Washington had not yet taken an official stance, it "unofficially" welcomed highly qualified female candidates to lead international agencies.

"As you know, the time frame for candidates to be put forward has a few more weeks to run, so officially the United States will be assessing and then eventually announcing its position.

"Unofficially, let me say we welcome women who are well qualified and experienced to head major organisations such as the IMF," she said, when asked whether Washington would support Lagarde.

Lagarde, 55, announced her candidacy on Wednesday to succeed her compatriot, Dominique Strauss-Kahn, who resigned last week after being charged with the attempted rape of a hotel maid in New York. He denies the charges.

The only other declared candidate is Mexican central bank chief Agustin Carstens. Major emerging nations are demanding that the job should no longer automatically go to a European but have not rallied behind Carstens or any other candidate.

China called on Thursday for "democratic consultation" over who should lead the IMF, leaving room for wrangling over Lagarde's candidacy, which the French government has said Beijing has indicated it will support.

The Chinese Foreign Ministry said in a statement that senior management of the global lender "should enhance representation of the emerging market countries and reflect changes in the world economy".

A senior Western diplomat said emerging nations privately accept that Lagarde will get the position, and Carstens' entry into the race was meant more as a signal to the United States and Europe that emerging markets will expect one of their own candidates to lead the IMF after Lagarde.

The envoy said Western countries were not concerned about a pending legal case in which Lagarde is accused of abusing her authority to reach a generous arbitration settlement with a former businessman, because French President Nicolas Sarkozy had assured other governments the case would not get off the ground.

European Union diplomats say they expect a negotiation in the coming weeks on a Western commitment to open up the top IMF job in future to non-European nationalities.

In her first comments as a candidate, Lagarde said she aimed to enhance the IMF's "representativity" and reach out to emerging markets if chosen for a five-year term next month.

Aides said she planned to visit key emerging countries including China and Brazil soon to garner support for her IMF bid, but no dates have been set yet. (Reporting by Arshad Mohammed, writing by Paul Taylor, editing by Mike Peacock)

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