MercoPress. South Atlantic News Agency

European powers endorse French minister Lagarde as next IMF chief

Christine Lagarde would be the first woman to lead the IMF

European leaders raced Saturday to nominate a successor for fallen IMF chief Dominique Strauss-Kahn before a G8 summit in France next week, with French Economy Minister Christine Lagarde in pole position.

Strauss-Kahn left and was placed under round-the-clock house arrest after being indicted for the alleged attempted rape of a New York hotel maid last Saturday.

German Chancellor Angela Merkel all but endorsed Lagarde, telling a Berlin news conference: “Among the names mentioned for the IMF succession is French Minister Christine Lagarde, whom I rate highly”.

But diplomats said some European Union countries questioned whether the highly regarded corporate lawyer, who would be the first woman to head the IMF, could be anointed before a special court decides next month if she should be investigated in a French legal case.

Since Strauss-Kahn resigned on Wednesday, EU governments have rushed to find a European replacement before emerging nations, which have long demanded a bigger say in running the Washington-based global lender, can mount a bid for the job.

The Europeans argue it is essential to keep global finance's top job while the IMF is so deeply engaged in helping Euro zone states such as Greece, Ireland and Portugal with massive debts.

Some officials said the absence of Strauss-Kahn's persuasive leadership had contributed to disarray in Europe this week over whether Greece should restructure or “re-profile” its debt, with the European Central Bank and Juncker publicly at odds.

IMF official Ajai Chopra, following Strauss-Kahn's line said a more comprehensive approach to the Euro zone debt crisis was urgently needed and the EU should do more to help Ireland regain access to debt markets.

While US Treasury Secretary Timothy Geithner called for an “open process that leads to a prompt succession”, sources in Washington said the United States, the IMF biggest financial contributor, would back a European. Together the US and EU nations hold more than half of IMF votes, giving them a big say over who leads it.

Asian, Middle Eastern and African diplomats at IMF headquarters said emerging nations were seeking a consensus candidate, with some support for former Turkish Economy minister Kemal Dervis, but it was not clear they would be able to agree.

Jean-Claude Juncker, who chairs Euro zone finance ministers and Italian Prime Minister Silvio Berlusconi endorsed Lagarde on Thursday and on Saturday UK jumped in.

Diplomats said European Council President Herman van Rompuy, who chairs summits of the 27-nation EU, and European Commission President Jose Manuel Barroso were trying to secure an agreement on her name after the three biggest European powers -- Germany, France and Britain -- threw their weight behind her.

Leaders of the Group of Eight industrialised nations -- the United States, Russia, Japan, Canada, Germany, France, Britain and Italy, plus the European Union -- meet in the French seaside resort of Deauville on May 26-27.