Phoenix 24
Europe’s central banking leadership faces a decisive transition.
DUBLIN, Ireland. France and Germany are approaching an agreement that could place Spanish economist Pablo Hernández de Cos at the head of the European Central Bank (ECB), succeeding Christine Lagarde. The negotiations, discussed during an informal European Union summit in Dublin, form part of a broader effort to redistribute influential positions within the institution’s six-member Executive Board.
Hernández de Cos, a former governor of the Bank of Spain and current general manager of the Bank for International Settlements, is competing against Klaas Knot, the former governor of the Dutch central bank. Both candidacies have been confirmed by the Eurogroup, although no final appointment has been announced.
German Chancellor Friedrich Merz acknowledged that discussions with French President Emmanuel Macron had advanced but emphasized that an agreement remained incomplete. Berlin must also consult its governing coalition before presenting its preferred arrangement.
Under the emerging proposal, Spain would secure the ECB presidency, Germany would obtain the chief economist position currently held by Philip Lane, and France would take responsibility for the market operations portfolio associated with Isabel Schnabel.
German economist Markus Brunnermeier, a professor at Princeton University, has been mentioned as a possible candidate for chief economist. The arrangement would give Europe’s two largest economies influential roles in monetary policymaking while allowing Spain to lead the institution for the first time.
France’s reported preference for Hernández de Cos is partly associated with his perceived flexibility on monetary policy. However, the choice involves more than individual economic philosophies, as governments are negotiating several senior appointments simultaneously.
European Council President António Costa has established November 18 as the deadline for nominations to the other Executive Board vacancies. Consultations with the European Parliament and the ECB’s Governing Council are expected to begin around the November 26 European summit.
The succession comes during a period of institutional change, with three senior ECB positions scheduled to become vacant within months.
If appointed, Hernández de Cos would also leave his leadership position at the Basel-based Bank for International Settlements, creating another major vacancy within international central banking.
The negotiations highlight the political complexity surrounding leadership appointments at an institution legally required to maintain independence in its monetary policy decisions.
For European financial markets, the eventual selection will matter because the ECB oversees interest rate decisions affecting borrowing costs, inflation and economic activity throughout the eurozone.
Although Hernández de Cos has emerged as a leading candidate, his appointment remains contingent on political agreement and the EU’s formal selection procedures.
Behind Every Decision, a Larger Consequence.