Key facts
- Lagarde will step down on February 7, 2027, according to an ECB statement issued on Thursday.
- Lagarde's term was due to end in October 2027, so she leaves about eight months early.
- European Council president Antonio Costa said the appointment process would proceed without delay toward a timely European Council decision.
- Spain's Pablo Hernandez de Cos and the Netherlands' Klaas Knot are vying for the job, with De Cos the favourite in an October Bloomberg survey of economists.
- The yield on 10-year German debt was one basis point lower at 3.36%, and the French bond premium over Bunds held at 154 basis points.
- Lagarde said in a video message: "I leave this institution with a sense of good work done, and an ECB that is fit for the future."
Euro-area governments were asked to submit nominations for a successor to European Central Bank President Christine Lagarde by Friday, November 6, after she announced she will leave the institution on February 7, 2027. Lagarde's term had been due to end in October 2027, so her departure comes about eight months early.
Lagarde, who became the ECB's fourth president and its second from France when she replaced Mario Draghi in 2019, announced the move in a video message. "I leave this institution with a sense of good work done, and an ECB that is fit for the future," she said. She is departing to be able to better engage in matters such as events in France, according to people familiar with what she told the Governing Council on Thursday.
European Council president Antonio Costa said the process to appoint her successor would be initiated on Thursday and proceed without delay, with a view to a timely decision by the European Council. Eurogroup head Kyriakos Pierrakakis said the group of euro-area finance ministers would act swiftly to prepare a recommendation, and German Chancellor Friedrich Merz said a decision would be reached by the end of the year.
Spain's Pablo Hernandez de Cos, a former Bank of Spain chief who currently heads the Bank for International Settlements, and the Netherlands' Klaas Knot are vying for the post. Economists surveyed by Bloomberg in October reckoned De Cos the favourite.
In bond markets, the yield on 10-year German government debt was one basis point lower at 3.36%, while the premium investors demand to hold French 10-year bonds over German Bunds held steady at 154 basis points, according to the report. The ECB lifted borrowing costs in June and September, and markets expect policy to be tightened further, the report said.
The winner will oversee interest rates for the eurozone's 21 member states and their more than 350 million people. Before Lagarde, the Netherlands' Wim Duisenberg was the only ECB president not to complete a full term, a curtailed stint agreed in advance to resolve a deadlock between France and Germany.