France would back Dutch central banker Klaas Knot to become the next European Central Bank president, but only if a French candidate takes the chief economist post, Reuters sources say. The proposal has President Emmanuel Macron's backing yet faces likely resistance from Germany as the race to succeed Christine Lagarde intensifies.
France would back Dutchman Klaas Knot to become the next ECB president in exchange for the chief economist job going to a French candidate, people familiar with the matter told Reuters. The informal proposal has the backing of French President Emmanuel Macron, though it would likely face stiff resistance from Germany.
Succession race gains momentum
The contest for Lagarde's job has picked up pace amid speculation that she and fellow Executive Board member Isabel Schnabel could both step down before their terms expire. Lagarde's eight-year mandate formally concludes at the end of October 2027, with Schnabel's term ending two months later. An early exit by both women would also speed up the process of filling the role of chief economist Philip Lane, whose term expires in May.
Knot leads France's shortlist
Under the plan, Knot would take the presidency with France's blessing, according to the sources, who spoke anonymously because the talks are private and still informal. Knot, 59, led the Dutch central bank from 2011 to 2025 and spent 14 years on the ECB's Governing Council, moving from friction with former President Mario Draghi to alignment with Lagarde.
Market participants view him as a pragmatist inclined toward tighter policy, though he was an early advocate for tighter policy during the 2022 inflation surge. He also chaired the Financial Stability Board from 2021.
De Cos and the chief economist bargain
Former Bank of Spain governor Pablo Hernandez de Cos, 55, who has headed the Bank for International Settlements since 2025, is seen as Knot's main rival for the presidency. His six-year term as Bank of Spain governor covered a historic interest rate hike cycle to tame runaway inflation. Because de Cos hails from southern Europe, his appointment would almost certainly require one of the euro zone's "frugal" northern countries to take the chief economist post to preserve the balance of power.
In return for backing Knot, France wants the chief economist role for itself, with Banque de France Deputy Governor Agnes Benassy-Quere, former OECD chief economist Laurence Boone, and BIS economist Helene Rey named as candidates on Paris's shortlist. The manoeuvre risks pushback from Berlin, which is also eyeing the chief economist post, widely considered the board's second most influential job.
Lagarde has stopped short of ruling out an early departure. According to Reuters, she said: "You are not going to see the back of me before 2027." Media reports have frequently linked her to the leadership of the World Economic Forum.
Sources: Investing.com (Reuters), Investing.com (Reuters)
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