Christine Lagarde to leave ECB on 7 February 2027

Christine Lagarde will step down as President of the European Central Bank on 7 February 2027. She has informed the ECB's Governing Council and the President of the European Council, António Costa, the institution announced. Her regular term of office was due to run until 31 October 2027, meaning she will step down almost nine months early.

The procedure to appoint a successor starts immediately. The new ECB President will be elected by the European Council, composed of euro area countries, in accordance with the procedure laid down in the Treaty on the Functioning of the European Union. According to Reuters, among the leading names for the post are former Dutch central bank governor Klaas Knot and former Spanish central bank governor Pablo Hernandez de Cos.

Costa thanks ECB leadership

European Council President Antonio Costa said he respected Lagarde's decision and that the process to select her successor would continue without delay.

“Through a global pandemic, war in Europe, energy crises and inflationary shocks, she has provided stable and decisive leadership, preserving the stability and resilience of the euro area,“ Costa said.

Lagarde has headed the ECB since November 2019. She was previously managing director of the International Monetary Fund between 2011 and 2019, and in 2007 became the first female finance minister of a country in G-7.

The decision comes amid new inflation risks

The news of the withdrawal was announced on the day of the ECB's monetary policy meeting. The central bank left its three main interest rates unchanged. The deposit rate remained at 2.50%, the interest rate on the main refinancing operations is 2.65%, and that on the marginal lending facility - 2.90%.

The ECB warned that the continued rise in energy prices creates upside risks to inflation and pressure on economic growth. According to Reuters, markets continue to expect a possible new interest rate hike in December, after higher oil and gas prices increased concerns about the permanent transmission of inflation to other goods and services.

Lagarde's early departure gives European leaders the opportunity to choose a successor before the presidential elections in France in 2027. Reuters indicates that among the discussed future commitments of Lagarde is the presidency of the World Economic Forum, but this possibility has not been officially confirmed.

Sources: money.bg, investing.com, apnews.com