Christine Lagarde will leave the ECB on February 7. Pablo Hernández de Cos and Klaas Knot are the names most mentioned to succeed her.
Christine Lagarde will step down as president of the European Central Bank on February 7, about nine months before the end of her term. This is reported by infoLibre, which describes the announcement as a surprise for the institution that sets the price of money for over 300 million citizens.
A source with direct knowledge explained to Reuters that Lagarde is resigning to be able to comment on political issues in her home country and internationally. Her departure coincides with the Davos meeting, where the World Economic Forum is reorganising its leadership. According to Demócrata, Lagarde, who is already part of its board, could chair the forum.
“to be able to comment on political issues in her home country of France and internationally”
Her departure forces European governments to choose a successor. Among the candidates are the Spanish Pablo Hernández de Cos, 55, former governor of the Bank of Spain and current director of the Bank for International Settlements in Basel, and the Dutch Klaas Knot, 59, who led the central bank of the Netherlands for fourteen years.
Hernández de Cos has the backing of the Spanish government and the European People's Party, according to the information gathered. In a Bloomberg survey among economists, he receives 12 votes compared to 9 for Knot, although in the Financial Times survey the advantage is minimal, with 26% to 24%. Knot, considered a hawkish profile advocating fiscal discipline, could gain support in the northern part of the continent.
The succession also affects other positions. If Knot were to take the role, fellow Dutchman Frank Elderson would have to leave his seat on the executive committee, as it is frowned upon for two members from the same country to hold responsibilities in that board. Additionally, the chief economist, Irishman Philip Lane, and German Isabel Schnabel, head of market operations, will also need to be replaced.
Experts consulted by infoLibre have differing views on Lagarde's mandate. Albert Guivernau, director of the Civismo Foundation, highlights that she preserved the institutional stability of the euro, although there are doubts about her delayed response to inflation. Paul De Grauwe from the London School of Economics believes the decision degrades the institution, as published by AFP. Eduardo Flores, CEO of Mi director financiero, points out that the interest rate hike came too late: the deposit rate rose from -0.5% to 4% between July 2022 and September 2023, and the average rate for loans of up to one million euros in Spain increased from 3.4% in 2022 to 5.3% in 2023.
You may also like
