European Central Bank (ECB) President Christine Lagarde attends a press conference on interest rate decisions in Frankfurt, Germany, Thursday, June 11, 2026.
Alex Kraus | Bloomberg | Getty Images
European Central Bank President Christine Lagarde announced on Thursday that she will resign on February 7 next year, about nine months before the end of her term.
“It is a great honor to serve this institution, and I would like to thank everyone who has supported me on this journey over the past seven years,” said Lagarde.
Lagarde has led the central bank since July 2019, steering policy responses to the coronavirus pandemic, the Russia-Ukraine war and a series of energy price shocks that sent inflation above 11% in the 21-nation euro zone. Her term was scheduled to end in October 2027.
She received a standing ovation from the central bank’s board on Thursday.
The announcement comes ahead of the ECB’s latest monetary policy decision, expected later on Thursday, where it is expected to keep interest rates on hold despite inflation in the 21-nation eurozone hitting a three-year high in September.
European Council President Antonio Costa thanked Lagarde for her “dedication”.
“She served as a stable and decisive manager, contributing to safeguarding the stability and resilience of the euro area,” Costa said in a statement.
It added that the process to appoint his replacement will begin immediately.
Ms. Lagarde was born in Paris in 1956 and worked as a senior lawyer before joining the French government. In 2007, she became the first female finance minister in a G7 country. She was appointed Managing Director of the International Monetary Fund in 2011 before joining the ECB.
According to a report in the Financial Times, Lagarde is seen as the frontrunner to become the next president of the World Economic Forum. In a recent media interview, she indicated that she has no plans to run in the 2027 French presidential election.
ECB seeks replacement for Lagarde
The ECB’s leadership is currently in talks to fill a number of senior positions, with chief economist Philip Lane and board member Isabel Schnabel also set to resign next year.
Claes Nott, former head of the Dutch central bank, and Pablo Hernández de Cos, former head of Spain’s central bank, are considered the leading candidates to replace Lagarde.
“Both are excellent candidates,” Carsten Brzeski, global head of macro at ING, told CNBC in an email Thursday.
“Nationality is also important. Mr Knott may have more support from the Nordic governments, but the question is whether Mr Decos will have the support of the current Spanish government.”
“In any case, both policies will bring a high degree of financial policy expertise to the table, something that Christine Lagarde has already had to acquire when she was in office.”
Holger Schmieding, chief economist at Berenberg, said that in addition to the usual issues of monetary policy capacity and regional balances, the ECB needs to consider who can deal with potential financial turmoil as bond yield spreads widen between member countries.
Market participants are debating whether the ECB may be forced to use any of its intervention mechanisms as France faces a deepening sovereign debt crisis and further uncertainty is expected with next year’s general elections.
“As a former chair of the G20 Financial Stability Board (FSB), Mr. Knott may have an advantage in this regard,” Schmieding said in the memo.
“The European Union is trying to protect itself, at least to some degree, from the risk that right-wing Marine Le Pen could win the French presidential election in April or May 2027.”
“However, the ECB has neither the power nor the desire to finance France’s fiscal folly. In our view, the ECB will only support France if Paris returns to more sustainable policies.”
