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Spain has become the first country to openly mark its claim in the race to succeed Christine Lagarde as president of the European Central Bank.
Europe’s fourth-largest economy will “actively work to ensure it holds an influential and meaningful position” at the ECB, the country’s economy ministry said on Wednesday morning, adding that Madrid seeks “a leadership role within Europe’s main economic institutions”.
The statement came hours after the FT reported that a person familiar with Lagarde’s thinking expects her to leave before her eight-year term as president expires in October 2027.
“The race is on,” an EU government official said.
According to the person familiar with Lagarde’s thinking, she wants to enable outgoing French President Emmanuel Macron and German Chancellor Friedrich Merz to find a new head for one of the EU’s most important institutions ahead of the French presidential election in April next year. It is not clear when Lagarde’s departure will take place.
A different official following the matter closely told the FT that the exit was likely to happen this summer after Lagarde’s early departure has now become “semi-official.”
The prospect of an earlier vacancy at the ECB’s top position accelerates a looming leadership reshuffle at one of Europe’s most important economic institutions. Three of the six top jobs will become vacant by the end of 2027 as both the terms of chief economist Philip Lane from Ireland and the German ECB board member Isabel Schnabel will expire in May and December next year respectively.
In the ECB’s 28-year history, Spain has never held the top job.
The country’s former central bank governor Pablo Hernández de Cos — currently general manager of the Bank for International Settlements in Basel — is widely regarded as a strong contender for the ECB’s top job, and narrowly turned out frontrunner in an FT poll among European economists in December.
“Spain stands ready to present the strongest and most qualified candidate should the process be brought forward,” the government said on Wednesday without mentioning any names.
An additional factor playing in Madrid’s favour is that it will no longer be represented on the ECB’s six-seat executive board from June 2026, when Luis de Guindos’s term as vice-president will have expired. Croatia’s central bank governor Boris Vujčić has been selected to replace the former Spanish economics minister.
Any new ECB executive board member will need the backing of at least 16 of the 21 member states representing at least 65 per cent of the population.
A former academic economist with a strong research pedigree, Hernández de Cos is described as a “really nice guy” with good social skills and an undogmatic approach to monetary policy, according to people who worked closely with him. “What matters for the job is character, competency and history, and Pablo is an excellent candidate in every respect,” one central banking veteran told the FT.
His strongest rival is former Dutch central bank governor Klaas Knot, who is widely seen as a strong contender given his academic background and long-standing experience in monetary policy. He came out a close second in the FT poll. Starting as a hawkish voice during the Euro crisis, Knot later endorsed the ECB’s controversial bond-buying programmes.
Last year, Lagarde publicly endorsed Knot as a potential next ECB president. “He has the intellect, the stamina [and] he’s capable of including people and that is a skill that is rare and very necessary,” she told Dutch podcast College — Leaders in Finance, adding he was “not the only one” capable of doing the job.
Another former central banker said Hernández de Cos was “more diplomatic” than Knot.
Both Bundesbank president Joachim Nagel and Schnabel have lobbied for the German government’s endorsement for the ECB top job, but many observers are sceptical that Berlin could muster enough support as the European Commission’s presidency is also held by a German, Ursula von der Leyen. Schnabel faces the additional obstacle of already having a non-renewable term on the ECB’s executive board.
A German government official said the country was “always willing to put forward a potential candidate for the ECB presidency” and stressed that Germany’s “key demand” was that “stability will remain the bedrock of the future ECB presidency”.
A different Berlin insider said Knot would be “a candidate close to German fiscal belief”, adding that it was too early to come to definitive assessments.
Two people close to Berlin’s thinking suggested that Germany may try to secure the ECB’s chief economist position instead, with German academic Markus Brunnermeier — an economics professor at Princeton University — being a very strong candidate.
But this could clash with Paris’s ambition for the Lane succession, with several people close to the discussions suggesting France could endorse a strong female candidate such as Hélène Rey, Agnès Bénassy-Quéré or Laurence Boone.
One senior European official involved in discussions with Paris said appointing outgoing Banque de France governor François Villeroy de Galhau was the only way to avoid a larger reshuffle of top EU posts.
Villeroy de Galhau on Wednesday told the French parliament he had heard the “rumours” about Lagarde’s departure but insisted his decision to leave before the end of his term was personal and not influenced by any political considerations.
One member of the ECB’s governing council told the FT that Lagarde has not yet informed the body of a potential early exit.
The ECB told the FT on Wednesday morning that Lagarde “has not taken any decision regarding the end of her term”, adding that the president was “totally focused on her mission”.
Additional reporting by Henry Foy and Paola Tamma in Brussels
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