European Central Bank boss resigns early to allow search for successor to begin
The European Central Bank left its benchmark interest rate unchanged at 2.5 per cent on Thursday, but the decision was completely overshadowed by news that its president, Christine Lagarde, is set to resign nine months early.
Lagarde, who is 70, will step down on 7 February, the ECB said, even though her eight-year term was previously due to run until 31 October 2027.
The ECB president chairs the bank’s governing council, the body that sets interest rates for the 21 countries using the euro.
Those rates shape borrowing costs for everything from house purchases to new factories, and the bank acts as the European Union’s chief crisis fighter in times of economic and financial turbulence.
Lagarde’s early departure clears the path for European leaders to pick a successor before France’s presidential election next year.
“It has been a great pride and a huge privilege to serve this institution,” Lagarde said in a video message posted on X.
“I think that I leave this institution with a sense of good work done and an ECB that is fit for the future.”
The announcement had been anticipated after speculation that Lagarde would go early so that EU leaders could choose a successor while pro-EU French President Emmanuel Macron remains in office.
An early choice would guard against the possibility that right-wing presidential candidate Marine Le Pen might win the election and influence the decision.
“That she leaves early is no surprise and does not change the outlook for ECB policies,” said Holger Schmieding, chief economist at Berenberg bank.
French President Emmanuel Macron told Reuters on Thursday that Lagarde’s succession must be prepared in “an orderly and balanced way” with European partners.
Macron added that he expressed his deep gratitude to Lagarde for her action during her time at the ECB.
France’s right-wing was less pleased by the move.
Jean-Philippe Tanguy, who is charged with drafting economic policy for Le Pen’s election manifesto, told Reuters The move showed contempt for the rule of law.
