Lagarde Chances

The IMF plans to name a new director by June 30, and Lagarde's chances of securing the role may hinge on how she resolved a two-decade-old dispute involving a supporter of President Nicolas Sarkozy. At the time, Lagarde was a partner with the Chicago-based law firm Baker & McKenzie LLP, 12 years before she joined the government.

France's Cour de Justice de la Republique, which oversees ministers' actions in office, has until June 10 to decide whether to investigate if Lagarde abused her powers in agreeing in 2007 to send the case to arbitration. It resulted in a 385 million-euro ($550 million) award to Bernard Tapie, a former Socialist minister who endorsed Sarkozy's presidential effort.

Lagarde has rejected accusations her decision to take the matter to arbitration and not appeal the award was a reward for Tapie's support of Sarkozy.

First Woman

Britain's Osborne praised Lagarde for her leadership skills during France's presidency of the Group of 20 and for her "strong" advocacy of countries taking steps to reduce budget deficits. Last week, Osborne had left open the possibility that Britain might endorse a non-European to head the fund.

"On the basis of merit, I believe Christine is the outstanding candidate for the IMF, and that's why Britain will back her," Osborne said in an e-mailed statement late yesterday. "It would be a very good thing to see the first female managing director of the IMF."

Lagarde, 55, declined to comment on her potential candidacy when questioned by reporters in Paris last week. She said that the successor to Strauss-Kahn should come from Europe.

A fluent English speaker, Lagarde's negotiating abilities helped clinch agreement on the euro area's sovereign bailout fund announced in the early hours of May 10 last year, according to a person who was there. The 16-member group's finance ministers worked through the night to create a 750 billion-euro fund ($1.07 trillion) to support financially distressed governments and hold the bloc together.

European Unity

Merkel described Lagarde as an "excellent and experienced person," Deutsche Presse-Agentur said. Austria may support Lagarde, Finance Minister Maria Fekter said two days ago, according to Agence France-Presse. Italian Prime Minister Silvio Berlusconi said in a statement last week Lagarde would be "an excellent choice" as Europe's candidate.

France has supplied four of the 10 IMF managing directors so far, including three of the past five.