The Netherlands and Spain submitted candidates on Friday to succeed Christine Lagarde as president of the European Central Bank, with former Spanish central bank governor Pablo Hernández de Cos and former Dutch central bank president Klaas Knot the only names put forward by the 5 p.m. deadline.
Both candidacies are part of a wider reshuffle that also involves France and Germany, as Europe's four economic powerhouses negotiate over seats on the ECB's six-member executive board. The board oversees the bank's day-to-day operations and an army of economists who scrutinize financial markets and the wider economy. The ECB is one of the most powerful institutions in Europe, responsible for setting interest rates to keep prices stable at 2 percent over the medium term.
The selection process comes as the ECB faces several upcoming departures. German economist Isabel Schnabel will leave her board seat on Jan. 3 for a job at the International Monetary Fund, and Berlin is determined to keep the seat. France, meanwhile, is targeting the chief economist role, which will open when Ireland's Philip Lane completes his eight-year term on May 31.
Eurozone finance ministers will take stock of the shuffle at Monday's Eurogroup meeting in Brussels. Neither Hernández de Cos nor Knot is scheduled to attend the closed-door meeting, but their national ministers will talk up their respective compatriots. Diplomats expect EU leaders to engage in horse trading at an informal summit in Dublin at the end of next week. The deadline for candidates to replace Schnabel is Nov. 27.
Analysis
Why This Matters
- The ECB's president helps set interest rates for the euro area, so the outcome will shape borrowing costs and inflation policy across the currency union.
- The race will test how Europe's four largest economies balance national influence over one of the bloc's most powerful institutions.
- The result will also shape the ECB's leadership for years, as the board fills several vacancies at once.
Background
The European Central Bank sets monetary policy for the euro area, with a six-member executive board handling day-to-day management. Its president is chosen by eurozone governments and EU leaders, usually through negotiation among member states. The appointment is being decided alongside a series of other board vacancies, making the current round an unusually broad reshuffle.
Key Perspectives
Germany: is determined to hold onto the executive board seat that Isabel Schnabel will vacate on Jan. 3 when she leaves for the IMF.
France: is targeting the ECB's chief economist role, which will open when Philip Lane completes his eight-year term on May 31.
Spain and the Netherlands: have both put forward candidates for the presidency, and their finance ministers are expected to make the case for their nationals at Monday's Eurogroup meeting.
What to Watch
- Monday's Eurogroup meeting in Brussels, where eurozone finance ministers take stock of the ECB reshuffle.
- The informal EU leaders' summit in Dublin at the end of next week, where horse trading is expected.
- The Nov. 27 deadline for candidates to replace Isabel Schnabel, and how France's push for the chief economist role unfolds.
Checked
12 claims in this story checked against 1 source: 11 supported.
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- SupportedSpain and the Netherlands are in a two-way race to head the European Central Bank.Politico Europe: “Pablo Hernández de Cos, a former governor of Spain’s central bank, and the Netherlands’ Klaas Knot, a former president of the Dutch central bank, were the only candidates to emerge after the 5 p.m. deadline, as expected.”
- SupportedPablo Hernández de Cos and Klaas Knot are the only candidates to replace Christine Lagarde.Politico Europe: “Pablo Hernández de Cos, a former governor of Spain’s central bank, and the Netherlands’ Klaas Knot, a former president of the Dutch central bank, were the only candidates to emerge after the 5 p.m. deadline, as expected.”
- SupportedThe Netherlands and Spain submitted candidates on Friday to succeed Lagarde.Politico Europe: “The Netherlands and Spain on Friday submitted candidates to succeed Christine Lagarde, who steps down as president of the European Central Bank on Feb. 7.”
- Partly supportedHernández de Cos and Knot were the only names put forward by the 5 p.m. deadline.Politico Europe: “were the only candidates to emerge after the 5 p.m. deadline, as expected.”
- SupportedHernández de Cos is a former governor of Spain’s central bank, and Knot is a former president of the Dutch central bank.Politico Europe: “Pablo Hernández de Cos, a former governor of Spain’s central bank, and the Netherlands’ Klaas Knot, a former president of the Dutch central bank”
- SupportedThe candidacies are part of a wider reshuffle involving France and Germany as Europe’s four economic powerhouses negotiate for seats on the ECB executive board.Politico Europe: “Their candidacies are part of a larger game of musical chairs that includes France and Germany, as Europe’s four economic powerhouses negotiate how to secure their seats on the ECB’s executive board.”
- SupportedIsabel Schnabel will leave the ECB on Jan. 3 for a job at the International Monetary Fund.Politico Europe: “German economist Isabel Schnabel will vacate on Jan. 3, when she leaves the ECB for a job at the International Monetary Fund.”
- SupportedBerlin is determined to keep the seat Schnabel will vacate.Politico Europe: “Berlin is determined to hold onto the seat that German economist Isabel Schnabel will vacate on Jan. 3”
- SupportedFrance is targeting the chief economist role when Philip Lane completes his eight-year term on May 31.Politico Europe: “Paris, meanwhile, is targeting the ECB’s chief economist role once the Irish incumbent Philip Lane concludes his eight-year term on May 31.”
- SupportedEurozone finance ministers will take stock of the ECB reshuffle at Monday’s Eurogroup meeting in Brussels.Politico Europe: “Eurozone finance ministers will take stock of the ECB shuffling at Monday’s Eurogroup meeting in Brussels.”
- SupportedDiplomats expect EU leaders to horse-trade at an informal summit in Dublin at the end of next week.Politico Europe: “Diplomats expect EU leaders to engage in horse trading at an informal summit in Dublin at the end of next week.”
- SupportedThe deadline for candidates to replace Schnabel is Nov. 27.Politico Europe: “The deadline for candidates to replace Schnabel is on Nov. 27.”
