France and Germany have moved closer to a deal on the vacant top posts at the European Central Bank (ECB) that would put Spain’s Pablo Hernández de Cos at the head of the institution, according to German business daily Handelsblatt.
The former Bank of Spain governor and Dutchman Klaas Knot are the only two candidates to succeed Christine Lagarde, who has said she would step down on February 7, 2027. Her early exit allows the choice to be made while French President Emmanuel Macron remains in office, ahead of the presidential election in the spring.
Under the arrangement being discussed, a French candidate would take over the market operations portfolio held by Germany’s Isabel Schnabel, the paper reported. Berlin would in return secure the chief economist post, which Ireland’s Philip Lane is due to vacate on May 31, 2027.
Paris favoured Hernández de Cos because it considered him more willing than Knot to make concessions, according to the report. That marked a reversal from September, when Reuters reported France was ready to back Knot in exchange for the chief economist job.
Hernández de Cos was regarded as a swing voter on the ECB Governing Council, while Knot built a reputation as a policy hawk. The shift in Paris came amid investor concern over French public debt, with the market operations brief seen as crucial should the ECB be called on to calm bond markets.
The German Government has denied a report in French weekly Le Point that the two capitals had already sealed an agreement around the Spaniard. Nothing had yet been settled, Handelsblatt‘s sources said.
Talks were expected to continue today in Dublin, where EU leaders were gathering for an informal summit. Neither Spanish Prime Minister Pedro Sánchez nor Dutch Prime Minister Rob Jetten was due to attend, according to Spanish news agency Europa Press.
The same sources pointed to what they described as an over-representation of southern Europeans across EU institutions and financial bodies. They cited the Spaniard’s own post at the Bank for International Settlements and Greece’s Kyriakos Pierrakakis at the head of the Eurogroup.
Germany’s possible picks for chief economist reportedly include Princeton economist Markus Brunnermeier and Tobias Adrian. Adrian previously headed the International Monetary Fund’s (IMF) Monetary and Capital Markets Department, the role Schnabel is due to take up when she leaves the ECB on January 3.
On the French side, Le Monde and the Financial Times have named Laurence Boone as a leading option for market operations. The former chief economist of the Organisation for Economic Co-operation and Development and former French Europe minister now heads Santander’s corporate and investment banking business in France and Ireland.
