ECB President Christine Lagarde to step down early on February 7
Lagarde will leave the European Central Bank about nine months before her eight-year term ends, opening a succession race ahead of France's presidential election.
At a glance
- ECB President Christine Lagarde will step down on February 7, about nine months before her eight-year term ends.
- The early exit gives EU leaders time to appoint a successor before April's French presidential election.
- Lagarde, appointed in 2019, led the ECB through the pandemic, the war in Ukraine and the 2022 inflation surge.
European Central Bank President Christine Lagarde will step down on February 7, leaving the post about nine months before her eight-year term was due to end and opening a race to choose her successor.
Lagarde announced the decision in a filmed statement posted on X on Thursday, saying she was leaving "with a sense of good work done and an ECB that is fit for the future".
Succession before France votes
The timing gives European Union leaders room to choose a replacement before April's French presidential election, which polls have suggested far-right candidate Marine Le Pen is favoured to win. It could also allow current European Council members, including French President Emmanuel Macron, to take part in the appointment before France votes.
Macron, who is not allowed to run again, thanked Lagarde on X for "the determined action she led at the head of the European Central Bank" during "a period marked by numerous crises", and said the transition must be prepared "in an orderly and balanced manner with our European partners".
German Chancellor Friedrich Merz, who leads the eurozone's largest economy, said Lagarde had guided the bank "with great aplomb during challenging times". European Commission President Ursula von der Leyen thanked her "for everything you have done for Europe and the euro", and French Finance Minister Roland Lescure said she had "brilliantly modernised and strengthened" the institution.
Markus Ferber, a German member of the European Parliament, warned against the appearance of political timing: "If the impression arises that such a departure is timed around national elections, it damages trust in an institution that must stand above any domestic political calculation."
A tenure marked by crises
Appointed in October 2019, Lagarde steered the bank through the COVID-19 pandemic, Russia's full-scale invasion of Ukraine and the United States-Israel war on Iran. She was the first ECB chief with no formal economics training or central banking experience, having previously served as France's finance minister and head of the International Monetary Fund — a background that prompted some market participants to warn of a "credibility risk".
The ECB was criticised for responding too slowly to the 2022 inflation surge, caused by post-pandemic supply chain bottlenecks and the war on Ukraine. Inflation is currently running at almost double the bank's 2 percent target, amid worries over France's public finances.
Markets and what comes next
Marcel Fratzscher, president of the German Institute for Economic Research, told Reuters the early exit gives governments "an opportunity to appoint a successor who will safeguard European values and protect the ECB's independence".
Markets appeared unruffled. "Our view is that institutional behaviour is likely to outlast Lagarde and be quite similar, whoever takes over," Simon Dangoor, head of fixed income macro investing at Goldman Sachs, told Reuters.
Sources told the AFP news agency that leaving early would give Lagarde "greater freedom to express her views". She has hinted she could campaign in the French presidential race, saying a European voice was needed in the debate.
Source: Al Jazeera.
Questions and answers
- Why is Christine Lagarde stepping down early?
- She said in a filmed statement on X that she was leaving "with a sense of good work done and an ECB that is fit for the future". Sources told AFP that leaving early would give her greater freedom to express her views.
- When does Lagarde leave the European Central Bank?
- She will leave the post on February 7, roughly nine months before the scheduled end of her eight-year term. She was appointed in October 2019.
- Who will replace Lagarde at the ECB?
- No successor has been named. The timing gives EU leaders, including French President Emmanuel Macron, the chance to make the appointment before April's French presidential election.
