Christine Lagarde is unlikely to complete her term as president of the European Central Bank (ECB). This is evident from a Bloomberg poll among economists.
More than half expect Lagarde to resign this year. Less than 30 percent think she will serve her full eight-year term, which ends in October next year.
If Lagarde leaves prematurely, the Dutchman Klaas Knot is the main candidate to succeed her.
Knot most often mentioned as successor
According to about 57 percent of the economists surveyed, Knot is most likely to take over the position if Lagarde leaves early. Knot was previously president of De Nederlandsche Bank.
If Lagarde does complete her term, Pablo Hernández de Cos, currently head of the Bank for International Settlements, is most often mentioned as his successor.
Speculation about Lagarde’s future increased after reports that she may want to resign before the French elections. This would allow President Emmanuel Macron to influence the choice of her successor.
A statement from the ECB did not dispel the rumors. Lagarde herself was also unable to allay the doubts by saying that staying on is her “baseline”.
Concerns about ECB credibility
A possible early departure of Lagarde is also politically sensitive. Some observers see it as a way to prevent the radical right in France from helping to decide on the new ECB president.
But not everyone is convinced. Modupe Adegbembo, economist at Jefferies, says France cannot push through its own candidate on its own. According to her, there is a greater risk that the whole issue will damage the ECB’s credibility without achieving any results.
Of those surveyed, 52 percent think that the ECB’s reliability will suffer if Lagarde leaves prematurely. About a third are also concerned about the independence of the central bank.
Early departure affects independence
Dennis Shen of the International School of Management in Berlin says an early departure would send the signal that the ECB is not fully politically independent. At the same time, he notes that involvement of the radical right in the selection of a successor could be even more damaging.
To avoid delays, European leaders could choose to appoint Lagarde’s successor before the end of her term.
More than two-thirds of respondents can imagine a scenario in which a candidate is appointed before the French elections, while Lagarde remains in office. Half think that such an outcome would weaken their position in the remaining period.
Source: https://newsbit.nl/lagarde-stapt-mogelijk-dit-jaar-op-als-ecb-president-klaas-knot-favoriet-als-opvolger/
