Early resignation? Lagarde’s interview fuels speculation

Lagarde’s regular term of office runs until the end of October 2027. Presidential elections are scheduled in France in April 2027. The one from Jordan Bardella led right-wing and Eurosceptic National Rally Party (RN) Surveys give him a chance of winning the race for the top job at the Elysee Palace. president Emmanuel Macron may not run again after two terms in office.

Speculations were denied in February

After initial speculation about an early withdrawal, Lagarde confirmed in February her intention to complete her term in office. The Financial Times reported at the time that the 70-year-old could resign from her position as ECB President early in order to give Macron a say in determining her successor. Lagarde referred opposite Les Echos on their task of ensuring price stability:

“Given that we are going through another turbulent period, I believe that the captain of the ECB ship must remain on board.” When asked whether she could imagine withdrawing early if the situation calmed down in order to get involved in the French presidential election campaign in 2027, the Frenchwoman said: “That is possible. I am convinced that a European voice must be heard in the French presidential debate.”

What market observers say about it

“There has been speculation recently about Lagarde’s early resignation. There is still no immediate announcement of his resignation,” said Chief economist Alexander Krüger von ABN Amro Germany on Friday about the interview comments. An early end to office will be likely when the inflation rate has approached the two percent price target. “This mission is unlikely to be completed until spring 2027. The ECB will maintain its inflation-focused stance under its successor,” said Krüger.

Commerzbank chief economist Jörg Krämer suspects that Lagarde wants to prevent the French right from having an influence on the appointment of a new ECB president if he moves into the Elysee Palace. “That was also the reason why the French central bank chief Villeroy resigned from his position prematurely,” said Krämer. Francois Villeroy de Galhau left his post early in June. Macron’s confidante Emmanuel Moulin took over. Villeroy had already announced his withdrawal in February. He cited personal reasons for this.

Lagarde: That was just a joke

In the interview with Les Echos Lagarde did not rule out the possibility that she could join the election campaign debate as ECB President in the coming months and also enter into an open discussion with candidates: “I would tell you that France has to play a decisive role in the economic future of our continent. And that without this European environment and this anchoring, our economic prospects would be at least uncertain,” said Lagarde.

When asked whether she could actively support a candidate or even have ambitions for the French presidency herself, she remained vague: she would “think about it,” she told the interviewers, who then asked more questions. To which she replied: “No, it was just a joke. I don’t think that’s planned at the moment.”