Euro zone finance ministers discussed Monday who should replace European Central Bank President Christine Lagarde, with two candidates in the running: former Dutch central bank governor Klaas Knot and Pablo Hernández de Cos of Spain, who heads the Bank for International Settlements.
Ministers were not expected to recommend a candidate at the meeting, Reuters reported. The EU process has three steps: a recommendation from the ministers, a European Parliament hearing and a final decision by leaders. Eurogroup President Kyriakos Pierrakakis said ministers understand the need to move quickly, while indicating the decision will be made by leaders.
Lagarde is due to step down on Feb. 7, nine months before her term ends. Two other seats are also opening: Executive Board member Isabel Schnabel leaves on Jan. 3, 2027, and Chief Economist Philip Lane’s term ends in May 2027. Officials told Reuters the three jobs are likely to be negotiated as a package among France, Germany, Spain and the Netherlands.
EU governments hope to settle the appointment by the end of the year, according to Reuters.
Investors are watching the race as they price in an ECB rate increase of at least 25 basis points early next year, based on LSEG data cited by Reuters. Investors will watch for any signal on the candidates’ support among EU leaders.
