How Europe will choose Christine Lagarde’s successor as European Central Bank president

Christine Lagarde’s non-renewable eight-year term runs through October of next year and a decision on a new president would typically be taken over the summer, based on previous appointments

• ECB chief Lagarde may leave before her term ends in October 2027
• Macron may choose successor before French elections with early exit
• Klaas Knot, Pablo Hernandez de Cos seen as top candidates

Did our AI summary help?

European Central Bank chief Christine Lagarde may leave her post before the end of her term, allowing a successor to be appointed before a potential far-right victory in French presidential elections in 2027.

Speculation about a departure has swirled around Lagarde for some time, but increased after Bank of France chief Francois Villeroy de Galhau, who also sits on the ECB’s Governing Council, recently announced his early exit. That leaves the selection of his replacement to France’s Emmanuel Macron, rather than any successor from Marine Le Pen’s National Rally.

The Financial Times reported Wednesday that Lagarde wants to enable Macron and German Chancellor Friedrich Merz to find her replacement, without indicating when she may exit. The ECB said that Lagarde is “totally focused on her mission” and has not made any decisions about her end of term.

Lagarde’s non-renewable eight-year term runs through October of next year and a decision on a new president would typically be taken over the summer, based on previous appointments. But there appears to be a growing chance that the process could have to start sooner.

How is the ECB President appointed?

The European Council starts the process with EU member countries proposing candidates, and finance ministers discussing them at joint meetings of the Eurogroup. Once the Eurogroup finds an agreement on a candidate, they are then recommended to the European Council and invited to appear before the European Parliament’s Committee on Economic and Monetary Affairs.

The European Parliament and the ECB’s Governing Council also give their opinion on the candidate. Finally the European Council appoints the new president.

In practice, the real action happens before this formal process. The ECB presidency is subject to intense wheeling and dealing as governments negotiate over potential candidates, with the largest member states keen to ensure their own status as well as keep others from having an outsize influence. As head of the euro zone’s second-biggest economy, Macron would therefore play a key role in the haggling.

For example, the agreement over Lagarde back in 2019 was part of a mammoth horse-trading package for EU jobs that took place four months before her term began, including the role of presidency of the European Commission.

Once the political decision was made, she was formally recommended by the Council in early July. She appeared before the European Parliament in September, which gave a favorable but non-binding opinion, and was formally appointed in October. For her predecessor, Mario Draghi, the timings were similar.

What other posts could influence the horse trading?

In addition to the presidency, two other vacancies are coming up, including that of ECB Chief Economist Philip Lane in May 2027. The need for European Parliament deliberations and the desire to avoid spilling into the French election year could push leaders to make a decision by December 2026. Leaders might also agree on the succession to Executive Board member Isabel Schnabel, who will leave at the end of 2027.

Beyond the ECB itself, there are other roles coming up, including the European Parliament president at the end of this year and European Council president in May 2027. Both incumbents are likely to seek reelection, though any ECB contest could play into those positions.

What is the concern all about?

French election polls show a National Rally candidate, either Le Pen or Jordan Bardella, performing strongly. Seen from Brussels, the party’s rise is a cause for concern, given that such a euroskeptic force has never been so close to taking office in a founding member of the EU.

Le Pen previously campaigned for France to leave the euro, though she has since changed position. Bardella said in November that the party would push the ECB to relaunch quantitative easing as a way to tackle France’s bloated debt burden.

Who is in the running to succeed Lagarde?

Former Dutch central bank chief Klaas Knot is seen as most likely to prevail, according to a Bloomberg survey of economists, while Spain’s Pablo Hernandez de Cos, currently at the Bank for International Settlements, is also among the top candidates.

Bundesbank President Joachim Nagel is another name in the mix, along with Schnabel. Nagel recently warned of the danger of central banks prioritizing fiscal objectives, and said that US President Donald Trump’s attacks on the Federal Reserve shouldn’t become a blueprint for politicians elsewhere.

On Wednesday, a spokesman for Merz said Germany could theoretically propose a German candidate to take over the ECB. (A German has never held the role.)

Are there other examples of elections shaping a nomination procedure?

In addition to Villeroy’s early resignation in France — which raised eyebrows though the central banker insisted it was for personal reasons — Austria offers a recent example of front-loading appointments before a possible far-right victory.

In March 2024, six months before elections, the-then center-right-led government opened applications for all board vacancies at the central bank, well before some were due. Economy Minister Martin Kocher won the nomination as governor that August and took office 13 months later.

What are the drawbacks?

There may be a cost to denying choices to the French right, as it plays into their narrative that the establishment is trying to undercut democratic processes. Trump himself has deployed the argument in the US, and the European right could seize it as well.

At a meeting of finance ministers in Brussels this week, Austria’s Markus Marterbauer said that he backs maintaining the standard timeline to appoint Lagarde’s replacement. His German counterpart, Lars Klingbeil, struck a similar note, saying that the ECB has timelines “and we are going to stick with them.”

French Finance Minister Roland Lescure declined to address that point when asked.