Mexico's Carstens seeks Brazil's support in IMF bid

Wed Jun 1, 2011 10:52am EDT

* Carstens faces challenge to convince Brazil

* Follows Lagarde visit to Brazil this week

* Carstens to hold a news conference at 1500 GMT

By Raymond Colitt

BRASILIA, June 1 (Reuters) - Mexico's central bank chief, Agustin Carstens, arrived in Brazil on Wednesday aiming to win crucial support in Latin America for his bid to the lead the International Monetary Fund.

Backing from the region's largest economy, which appears unlikely, would be a major lift for Carstens, who is widely seen as the underdog in the race against French Finance Minister Christine Lagarde.

Carstens will try to capitalize on discontent in Brazil and other major emerging economies over the practice of choosing a European to head the global lender.

The resignation of Dominique Strauss-Kahn, who stepped down as IMF managing director to defend himself against charges that include attempted rape, has led to calls from developing countries to end the traditional European lock on the job.

Mexican President Felipe Calderon called Brazilian President Dilma Rousseff on Tuesday to ask for her support for Carstens' candidacy, a Brazilian government spokesman said.

Although Brazil has been a strong proponent of a greater say for emerging economies in IMF decision-making, Carstens faces a difficult task winning its support. Brazil rivals Mexico for leadership in Latin America and sees Lagarde as having more clout to push for IMF reforms.

Brazil has not officially sided with either candidate but government officials say in private that the Rousseff administration is inclined to back Lagarde. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

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During her visit to the capital Brasilia on Monday, Lagarde stressed that she would push reforms to give emerging economies more say in IMF decision-making.

Carstens has questioned the argument made by several EU leaders that a European IMF chief would be more suited to deal with the euro-zone crisis. On recent stops in his international support-building tour, he has argued that an outsider would be in a better position to apply tough measures to help solve the crisis.

In an opinion piece published in the Financial Times, Carstens said European countries should not overestimate the role of the IMF in solving the sovereign debt crisis.

"From my own experiences in Mexico, as well as what I observed while serving on the IMF's executive board and later as a deputy managing director, for each country the tough decisions are political and they need to be taken domestically. The IMF cannot make these political decisions for Europe, whether its managing director is European or not," he wrote.

Carstens has also said that a French government claim that Lagarde has the support of the G8 group of leading economies was political spin.

Spain said on Tuesday that it backed Lagarde but would vote for Carstens because it shared with other countries a seat on the IMF executive board, which is headed by a Mexican.

The board has a June 30 deadline for picking a successor.

Carstens is scheduled to hold a news conference at 1500 GMT following his meeting with Finance Minister Guido Mantega. He will meet Brazil's central bank chief Alexandre Tombini in Sao Paulo on Thursday ahead of meetings with Argentine authorities on Friday. (Editing by Stuart Grudgings and Paul Simao)

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