ECB president Lagarde dampens exit talk, says she expects to finish her term
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European Central Bank president Christine Lagarde dampened speculation about an early exit, but stopped short of denying a Financial Times story reporting the speculation.
PHOTO: REUTERS
FRANKFURT – European Central Bank (ECB) president Christine Lagarde has attempted to calm speculation about her stepping down early that has called into question the central bank’s separation from politics, telling The Wall Street Journal that she expects to complete her term.
Ms Lagarde’s status as leader of Europe’s most important financial institution plunged into doubt this week after the Financial Times (FT) reported on Feb 18 that she planned to leave her job ahead of the French presidential election in 2027
In an interview with the Journal on Feb 19, Ms Lagarde dampened speculation about an imminent exit but still left the door slightly ajar to the possibility that she might leave before the end of her contract in October 2027.
“When I look back at all these years, I think that we have accomplished a lot, that I have accomplished a lot,” she told the paper. “We need to consolidate and make sure that this is really solid and reliable. So my baseline is that it will take until the end of my term.”
Central banks embroiled in ‘high politics’
Reuters exclusively reported on Feb 19 that Ms Lagarde sent a private message to fellow policymakers later on Feb 18, reassuring them that she was still concentrating on her job and that they would hear it from her, rather than the press, if she wanted to step down.
The ECB said Ms Lagarde has not made a decision about the end of her term, but stopped short of denying the FT report.
Some analysts thought an early exit risked entangling the ECB in European politics as it could give the impression of trying to ensure France’s eurosceptic far-right, which could win the 2027 presidential vote, had no say in her succession.
The ECB president said in 2025 that she intended to complete her term, a commitment she conspicuously failed to repeat this week.
Bank of France governor Francois Villeroy de Galhau announced plans to step down from his job last week, in a move that gives Mr Macron a chance to pick the next French central bank chief, drawing criticism from the far-right, who called the move anti-democratic.
Mr Villeroy’s early departure and the confusion over Ms Lagarde’s future come just as US President Donald Trump is attacking the Federal Reserve, further stoking debates about central bank independence from politics.
“After the recent events in the US, this is another reminder that although central banks are nominally independent, who leads them and their worldview is a matter for high politics,” economists at Oxford Economics wrote on Feb 20.
As the head of the euro zone’s second-largest economy, the French president plays an important role in wider negotiations to select the head of the ECB.
Polls show either far-right National Rally leader Marine Le Pen, or her protege Jordan Bardella, could win the French presidency
While the party has long dropped a call for France to leave the euro, the party is still seen as something of an unknown quantity in central banking circles.
Ms Lagarde told the Journal that she viewed her mission as price and financial stability, as well as “protecting the euro, making sure that it is solid and strong and fit for the future of Europe”.
She also said that the World Economic Forum was “one of the many options” she was considering once she left the central bank.
When Ms Lagarde’s name first emerged as a possible candidate for ECB president in 2019, she said she had no interest in the job and would not leave the International Monetary Fund, where she was the managing director. REUTERS
