Lagarde floats early ECB exit to play role in French presidential campaign

French President Emmanuel Macron with European Central Bank President Christine Lagarde at the World Economic Forum in Switzerland
Photo: Bloomberg

Christine Lagarde’s premature resignation would allow political leaders to choose her successor ahead of France’s next presidential election, POLITICO reports.

European Central Bank President Christine Lagarde said she could leave her post before the end of her term to take part in France’s 2027 presidential election.

Asked in an interview with French daily Les Echos published Thursday if she could step down early to “play a role” in the vote next year, the former French economy minister said it was “possible.”

“A European voice must be heard in the presidential debate,” she said.

Lagarde did not say what role she would seek if she returned to French politics, however. And she added that whatever decision she takes would depend on the stability of the European economy.

“Given that we are once again going through a turbulent period, I believe the captain of the ECB ship must stay on board,” she told Les Echos.

Lagarde’s term leading the ECB runs until October 2027, about six months after the presidential contest. Speculation about her future has been rife since the Financial Times reported in February that she was planning to leave early to allow French President Emmanuel Macron and German Chancellor Friedrich Merz to help pick her successor.

The 70-year-old European central bank chief told the Wall Street Journal a few days later that she planned to see out her term.

In her interview with Les Echos, Lagarde said that if she were to resign, it would be to debate Euroskeptic voices, such as those of the far-right National Rally.

“If it looked like there were prospects of a diminished French role in Europe, I think it’s important to explain why that would be a painful path for our country and our citizens,” she said.

Opinion polls suggest that Marine Le Pen and Jordan Bardella are the current favorites in the presidential race. But the National Rally cannot finalize its candidate until after Tuesday, when an appeals court delivers its verdict on an embezzlement case that knocked Le Pen out of the election.

Asked about the report, Bank of France Governor Francois Villeroy de Galhau struck a cautious tone. “I’ve read a rumor concerning Madame Lagarde,” he told lawmakers in Paris. “It doesn’t seem to be information to me and I’ll let the ECB comment. It seems like a rumor to me.”

There was also no knee-jerk reaction in markets, with the euro down only a touch as the dollar edged higher against most major peers. Market participants said it’s too soon to draw conclusions about the potential effect on the single currency.

Andrzej Szczepaniak, an economist at Nomura, said there’d be a “very limited” impact on ECB decision-making if Lagarde was replaced early, since inflation is expected to hover around 2% and the economy is recording stable growth.

“Whether it is Lagarde or someone else at the helm, the ECB will leave rates unchanged this year,” he said. “Ultimately, the ECB takes monetary-policy decisions by building consensus, and whomever replaces Lagarde is unlikely to radically shift or change the way the ECB works.”

Lagarde has been linked with an early departure from the ECB before but sought last June to quash talk that she’s planning to head the World Economic Forum, saying she’s “fully determined to deliver my mission and I’m determined to complete my term.”

She told Bloomberg Television more recently that she’s “not a quitter,” while saying that she was surprised to learn on accepting the ECB role in 2019 that the job carried a term of eight years rather than five.

Speculation ramped up again, however, following the announcement that Villeroy will leave his post prematurely, offering Macron the opportunity to replace him before elections next year that could be won by the far right.

A decision on Lagarde’s job would typically be taken in the summer before her term ends. But European governments may choose to fast-track finding a successor to avoid having to deal with Marine Le Pen or her protege, Jordan Bardella.

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