ECB Insight: Joachim Nagel— At Last, the Right German, but at the Wrong Time?

14 July 2025

By David Barwick – FRANKFURT (Econostream) – With less than a year until the next expected vacancy on the European Central Bank’s Executive Board—Vice President Luis de Guindos is due to depart at the end of May 2026— sets off a new round of openings, we continue our examination of policymakers with a credible shot not only at joining the Board, but at leading it.

Following closer looks at Olli Rehn, Klaas Knot and Pablo Hernández de Cos, it is now the turn of ECB Governing Council member and Deutsche Bundesbank President Joachim Nagel. Nagel shares strong credentials with the others.

For present purposes, we only touch on the critical role domestic politics will play in determining national backing, and likewise refrain from venturing too deeply into the thicket of other high-level EU appointments, though these will provide essential context when the time comes.

Although we think there are good reasons why Nagel has figured less prominently than his aforementioned peers in speculation about future ECB leadership, we certainly don’t want to ignore him.

At least to us, a German ECB president seems long overdue, all the more so in view of two French presidencies—totalling 16 years—since the inception of the still-young institution.

By most measures, Nagel would be an exceptionally strong candidate. A seasoned central banker and economist, he has led the German central bank since January 2022, meaning he has been at the heart of Eurozone monetary policymaking during a period marked by inflationary pressures and a generally volatile environment.

He was no outsider when he ascended to his current position. His career is deeply rooted in central banking, with over two decades of experience at the Bundesbank in various high-ranking roles. Between 2010 and 2016, he was a member of its Executive Board, overseeing core functions such as markets, IT, banking supervision, and internal operations.

During the global financial crisis, he led the Bundesbank’s crisis management team, gaining significant experience in handling systemic risk and market volatility—expertise that remains highly relevant in today’s economic landscape.

Nagel's international and development finance experience adds to his profile. After leaving the Bundesbank in 2016, he joined state-owned KfW Group as General Manager and later Executive Board member. From 2020 to 2021, he served as Deputy Head of Banking at the Bank for International Settlements in Basel, Switzerland.

He holds a PhD in economics from the University of Karlsruhe in Germany, where he also conducted research. His early career included a brief policy role with Germany’s Social Democratic Party before entering central banking. His mix of experience and his institutional ties make him a strong ECB leadership contender.

Nagel will turn 60 on the day de Guindos’ term is scheduled to end. Perhaps more relevant, he will be 61 years and 5 months old when President Christine Lagarde is expected to vacate her office in Frankfurt’s East Side, home of the ECB. That would make Nagel more than a year younger than previous incoming ECB presidents on average.

If Nagel has a shortcoming in terms of qualifications, it may be his somewhat less polished English, compared to those who would be his predecessors. In this regard, however, he is hardly alone among potential candidates; as previously noted, both de Cos and Rehn speak an English that could benefit from further refinement.

Another issue for him could be domestic party politics. Nagel has longstanding ties to Germany’s Social Democratic Party (SPD), having worked briefly in the 1990s as an economic and fiscal policy expert for the party’s executive committee.

That could complicate matters, given the SPD’s current status as junior partner in the ruling coalition. At the time of Nagel’s installation as Bundesbank president, the SPD held the chancellorship, along with significant influence over key appointments.

Still, though linked to the SPD, Nagel’s technocratic reputation and measured approach seem to transcend party lines, which may help mitigate partisan concerns.

Moreover, Nagel brings what his two immediate Bundesbank predecessors so conspicuously lacked: a relatively high ‘palatability factor’ in the eyes of peripheral euro area member states.

Whether by design or disposition, he has cultivated a reputation as a moderate—'middle of the road’, as one former German Governing Council member who knows him well described him.

He is reputed to be more centrist in Council meetings than his public rhetoric suggests, which is itself far from stridently hawkish and lately appears studiedly neutral.

This perceived moderation could under circumstances serve not just as a nice-to-have, but as a decisive attribute in the race for the ECB presidency. In southern European capitals—often wary of hawkish, rule-bound German central bankers—Nagel’s pragmatic tone and low-key style may help disarm initial scepticism about letting a German call the shots in Frankfurt.

Were Berlin to put his name forward, his broader acceptability could be a political asset, potentially tilting the balance in a contest where national alignments and informal diplomacy often matter as much as CVs.

Put simply, if there is ever going to be a German at the head of the ECB, then surely someone like Joachim Nagel.

And yet, we are a bit dubious about Nagel becoming an ECB Executive Board member for the foreseeable future.

To start, we can’t picture him leaving the Bundesbank—where he will be only four years and five months into his first term of office when de Guindos leaves the ECB—for just any Executive Board position.

(It is also true that German Board member Isabel Schnabel will then still have one year and seven months left to her term at the ECB, but that in itself might not doom Nagel.)

Despite the loss of monetary independence with the advent of the euro, the Bundesbank remains a venerated institution with a global reputation, emblematic of German financial stability and discipline. The position at its helm naturally exerts a strong attraction on someone with a career like Nagel’s.

In a similar context, we recall that Italy’s Fabio Panetta didn’t dither when asked by his government to return to Rome to head Banca d’Italia, despite still being shy of three years into the eight-year ECB Executive Board mandate.

The prospect of becoming ECB president—which would imply leaving the German central bank two years and two months early—would undoubtedly warrant more careful consideration by Nagel.

We aren’t sure what his decision would be in such a case, but one reason to doubt he would be offered the opportunity is that fellow German national Claudia Buch is already chair of the ECB Supervisory Board and will still have 14 months left in that position when Lagarde withdraws.

Moreover, we note that another compatriot of Nagel, Ursula von der Leyen, was nominated as European Commission president in 2019 as part of a broader political deal that included Lagarde’s appointment to the ECB presidency.

It is true that, in contrast to 2019, von der Leyen's second five-year term starting last December was won through broad-based political compromise rather than bilateral quid-pro-quo deals, so that her presidency shouldn’t—technically—constitute a hindrance for Nagel.

Still, were Nagel or any German to become ECB president in 2027, then at least two of the handful of very top EU jobs would apparently be held by German nationals. This might not sit well with Paris.

We do not rule out the possibility that such obstacles could be overcome, but from today’s perspective, this is not our baseline scenario.

In any case, for now it seems sufficiently unlikely so as to render moot a discussion of German competition Nagel might face for the position (we will explore German candidates for the Board more generally in one week).

In the end, Nagel’s candidacy would hinge on a delicate balancing act: his moderate style may appeal across euro area divides, particularly after years of polarisation between hawkish and dovish camps within the Governing Council. Yet the path to the ECB presidency would require significantly more than Berlin’s endorsement.

It would also demand political trade-offs, including whether other high-profile German figures—such as Buch or von der Leyen—are willing or able to relinquish their roles. The idea in particular of von der Leyen simply stepping aside to clear the way for Nagel or any other German seems highly improbable today.

Navigating these intertwined considerations, amid the wider EU political landscape, will be crucial in determining whether Nagel’s strong credentials translate into a seat at the helm of the ECB.

As the ECB presidential transition in 2027 draws near, observers will be watching closely for any sign that this complex calculus is shifting in Nagel’s favour.

It is too early to rule Nagel out, but we remain sceptical.