Christine Lagarde will leave the European Central Bank in March, nine months before her term ends, to speak freely on world affairs. She announced the move after the ECB held its key deposit rate at 2.5%. The race to succeed her starts now.
Christine Lagarde will step down as ECB president in March rather than October next year. She said the neutrality rules of her job stop her from influencing debate about financial and economic affairs.
Lagarde made the announcement at the end of a press conference on the ECB's decision to hold rates. The bank kept its key deposit rate at 2.5%, even though inflation climbed to 3.8% last month, its highest since September 2023.
Why Lagarde is leaving early
Lagarde said ECB officials must remain neutral on matters beyond monetary policy. She called the mandate "the price we pay for being independent".
She said she no longer feels comfortable staying silent on broader global issues. She also said she sees the truth very often damaged, contradicted by misrepresentation, without elaborating.
The former managing director of the International Monetary Fund has been tipped as a candidate to take over the World Economic Forum.
Succession race begins
Lagarde said a process has already started to identify her successor, and that there were plenty of excellent candidates. Potential candidates include the former Dutch central bank president Klaas Knot, the Spanish banker Pablo Hernández de Cos, the German central bank president Joachim Nagel, and Nadia Calviño, the president of the European Investment Bank.
The European Council, made up of EU heads of state, appoints the head of the ECB.
There has been speculation that French president Emmanuel Macron encouraged her to leave early. Holger Schmieding, chief economist at Berenberg bank, said the successor will still be appointed while Macron is in the Élysée Palace, ahead of the French presidential election in April/May 2027.
Source: The Guardian
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