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European Central Bank President Christine Lagarde plans to leave her job early, ahead of next year’s French presidential election, to give outgoing French leader Emmanuel Macron a say in picking her successor, the Financial Times said yesterday.
Lagarde’s term leading Europe’s most important financial institution is due to end in October 2027, but a victory by the far-right party National Rally (RN) in the spring 2027 French vote could complicate selection of the next ECB chief.
RN president Jordan Bardella on Tuesday accused Macron of attempting to stage a “democratic power grab” that would let him maintain influence even after leaving office.
France is the second-biggest European Union economy and no ECB president has been picked without a sign-off from Paris.
Concerns about central bank independence have risen with US President Donald Trump’s campaign against Federal Reserve Chair Jerome Powell, demanding sharp interest rate cuts.
Citing a person familiar with the matter, the FT reported Lagarde had not decided the exact timing of her departure but was keen that Macron and German Chancellor Friedrich Merz be the key European leaders choosing who succeeds her. Macron cannot run for a third presidential term.
A German government spokesperson said Berlin would “always propose a suitable candidate” to head the ECB, who would support Germany’s “ideas of stability” – a reference to its preference for strict inflation targeting and sound public finances.
“President Lagarde is totally focused on her mission and has not taken any decision regarding the end of her term,” an ECB spokesperson said.
That is a departure from earlier guidance. Last year, when the FT suggested she may leave early, the ECB said Lagarde was “determined to complete her term”.
Market reaction to Lagarde’s possible departure was muted yesterday as potential successors are not expected to transform policy.
“The ECB takes monetary policy decisions by building consensus, and whoever replaces Lagarde is unlikely to radically shift or change the way the ECB works, in particular should her replacement be one of those being touted in the media,” Nomura economist Andrzej Szczepaniak said.
Lagarde’s early departure could strengthen the case for EU leaders to make ECB Executive Board appointments as a package when the terms of chief economist Philip Lane and market operations chief Isabel Schnabel expire next year.
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