ECB’s Lagarde to resign in February 2027

European Central Bank President Christine Lagarde announced today that she will resign from her position on Feb. 7, 2027. She informed the Governing Council and European Council President António Costa of her decision.

Lagarde became the ECB’s fourth leader and the second from France when she took over from Mario Draghi in 2019. Her term was scheduled to end in October 2027. Spain’s Pablo Hernandez de Cos and the Netherlands’ Klaas Knot are competing for the position.

The European Council will appoint her successor following the nomination process outlined in Article 283 of the Treaty on the Functioning of the European Union.

The departure occurs as the Frankfurt-based ECB faces elevated inflation caused by the Iran war, along with volatile geopolitics, uncertain bond markets, and large European spending on defense and infrastructure.

Lagarde had repeatedly declined to commit to completing her eight-year term. Speculation has suggested she wants to take over the World Economic Forum, which organizes the annual Davos gathering. She has also indicated interest in campaigning for French presidential elections next spring, but ruled out running for the top job herself.

The ECB raised borrowing costs in June and September, and markets expect further policy tightening. Bond yields have risen globally, with investors particularly concerned about public finances in France. The premium on France’s 10-year bonds compared with Germany’s recently reached its highest level since 2011.

Before Lagarde, the Netherlands’ Wim Duisenberg was the only ECB president to not complete a full term. His shortened tenure was agreed in advance to resolve a deadlock between France and Germany before the ECB’s inception in 1998.

European leaders have summits in November and December where they will try to select a successor. Governments must also select a successor for Isabel Schnabel, who is cutting her term short by a year and will leave in early 2027 to join the International Monetary Fund. Chief Economist Philip Lane’s mandate also ends in May.