By David Barwick – FRANKFURT (Econostream) – Eurozone governments aim to agree by the end of December on a “grand package” covering the European Central Bank presidency and two other Executive Board positions, the Financial Times reported Monday, citing people familiar with the matter.
“The aim is to have a grand package agreed by the end of the year,” an EU diplomat briefed on the discussions reportedly told the newspaper.
The package would cover the succession of ECB President Christine Lagarde and the positions currently held by ECB Chief Economist Philip Lane and Executive Board member Isabel Schnabel, the FT reported. The terms of Lane and Schnabel end in 2027.
Two people told the newspaper that the World Economic Forum’s board could vote in October or November on appointing Lagarde as its next chair. Lagarde could announce her departure from the ECB at the October monetary policy meeting, the FT said.
Lagarde is expected to leave the ECB by early 2027, ahead of the French presidential election and before her eight-year term expires in October 2027, according to the newspaper.
The contest between the two principal candidates to succeed Lagarde, Bank for International Settlements General Manager Pablo Hernández de Cos and former De Nederlandsche Bank President Klaas Knot, remained wide open, the FT reported.
Deutsche Bundesbank President Joachim Nagel had privately expressed interest in the presidency but was considered an unlikely choice, the newspaper said. Appointing Nagel would leave German nationals heading both the ECB and the European Commission, an unprecedented combination, the FT noted.
Several people familiar with the matter told the newspaper that the German government’s support for Nagel was lukewarm.
Berlin was instead considering candidates for the ECB chief economist position, which the FT described as the institution’s second most important role after the presidency.
An ECB president from another country “balanced by a strong German chief economist ... is seen as a potential blueprint in Berlin,” a person with first-hand knowledge of the discussions told the newspaper.
Princeton University economist Markus Brunnermeier, Stanford University professor Monika Piazzesi and former senior International Monetary Fund economist Tobias Adrian were among the names under discussion in Berlin, according to three people briefed on the matter.
France was also targeting the chief economist role and considering Banque de France Deputy Governor Agnès Bénassy-Quéré and former Organisation for Economic Co-operation and Development Chief Economist Laurence Boone, now head of corporate and investment banking in France at Santander, the FT reported.
A French chief economist combined with a Spanish ECB president would be “hard to imagine” from Berlin’s perspective, three people familiar with the German government’s thinking told the newspaper. Paris would probably oppose the combination of a Dutch president and a German chief economist, the FT reported.
Several observers told the newspaper that another presidential candidate could emerge late in the process, as happened when Lagarde was put forward in 2019.