Thai finmin - worried by EU-U.S. cooperation on IMF post

TOKYO (Reuters) - Thai Finance Minister Korn Chatikavanij said on Thursday he was worried European countries would join forces with the United States to decide the next head of the International Monetary Fund and that such an approach would be unsustainable in the long term.

There is growing unease in Asian countries that some members of the IMF want to maintain the tradition of picking a European as its head despite pledges for a more open selection process.

China said on Thursday that any decision should be made through democratic consultation, refraining from taking a position on whether it would support France's nomination of its Finance Minister Christine Lagarde.

The Thai finance minister said Lagarde is perfectly capable of doing the job, but the IMF should consider the best talent regardless of nationality.

Asian countries have not put forward a candidate and their reluctance to back Lagarde could increase uncertainty over how the IMF will tackle the European debt crisis.

"I am sympathetic to the fact that the major task the IMF faces is the European crisis," Korn said after giving a speech.

"However, when Asia had its crisis, we didn't say that the head of the IMF had to be Asian."

The other declared candidate is Mexican Central Bank Governor Agustin Carstens. Largarde and Carstens are competing to succeed Dominique Strauss-Kahn, who faces charges of attempted rape and has resigned from the position.

Singapore's Finance Minister Tharman Shanmugaratnam and former Indonesian Finance Minister Sri Mulyani Indrawati would also be suitable to lead the IMF, Korn said.

Turning to the domestic economy, Korn said the Thai central bank is reaching a point where it will have to take stock of its string of interest rate increases.

Expectations of an interest rate increase in June to curb inflation have been reinforced after Thailand's economy grew 2.0 percent in the first quarter due to strong exports and consumer spending. That was faster than 1.3 percent growth in the fourth quarter.

Korn said it is questionable whether further interest rate hikes would be effective in curbing inflation as prices are rising due to higher fuel costs and not because of increasing demand.

(Editing by Edwina Gibbs)