Spain and Germany position for ECB presidency as Lagrace era nears end

The starter's gun has not yet fired officially, but the race to succeed Christine Lagarde as president of the European Central Bank in 2027 is already taking shape. For the first time since the euro's creation, the two largest economies that have never held the post, Germany and Spain, are positioning themselves for the top job. The Netherlands, meanwhile, has a credible dark horse in Klaas Knot. The next two years will see a near-total turnover of the ECB's senior leadership: the vice presidency, the chief economist role, the markets division and the presidency itself all fall vacant between May 2025 and late 2027.

Spain's calculated silence

Madrid's strategy is readable in what it is not doing. Luis de Guindos, Spain's representative on the six-member Executive Board since 2018, prepares to step down as vice president in June 2025. Ordinarily, a government would have named a successor by now. Spain has not. That silence, noted by market participants and policy insiders, suggests a deliberate choice: if Spain lets the vice presidency go without a fight, it signals an ambition for the presidency itself. The Spanish economy ministry, asked directly, offered only a boilerplate statement: "Spain remains firmly committed to having a meaningful and influential presence in key European institutions, as it has consistently done."

The calculation is not without risk. Spain has endured a six-year gap without any Executive Board seat, a conspicuous absence for the eurozone's fourth-largest economy. Germany, France and Italy have each held a seat continuously since 1999. If the other vacancies are filled before 2027 and Spain still has nothing, the gap widens. But Madrid believes it has a candidate strong enough to justify the gamble.

Pablo Hernández de Cos, 54, ran the Bank of Spain from 2018 to 2024, restoring its reputation after a series of supervisory failures before and during the financial crisis. Mario Draghi, then ECB president, groomed him for higher things. De Cos went on to chair the Basel Committee for Banking Supervision for two terms, the global standard-setter for bank regulation. Since January 2025 he has been general manager of the Bank for International Settlements in Basel, the central bankers' central bank.

The BIS complication

De Cos's move to the ECB would create a problem the Europeans have not solved. The BIS general manager post has traditionally been held by a European. If de Cos leaves, the slot opens, and Donald Trump's administration may argue that Europe already dominates the top tier of global finance. The IMF managing director (Kristalina Georgieva), the Financial Stability Board chair (Klaas Knot until 2024) and the Basel Committee chair (currently a European) are all European-led. Two people familiar with ECB thinking say the bank's current management is concerned about losing the BIS role. The argument is blunt: with the eurozone's share of global GDP shrinking, Washington may push for a non-European at the BIS, and a European vacancy in 2027 would be the perfect moment.

Germany's crowded field

Germany has never held the ECB presidency. Its two most prominent contenders in previous cycles, Axel Weber and Jens Weidmann, both resigned after clashing with the majority over crisis-era monetary easing. Their unbending orthodoxy made them unacceptable to the broader Governing Council. The inflation surge of 2022-24 has changed the climate. A hawkish profile is now an asset, not a liability. That should favour Joachim Nagel, the current Bundesbank president. Nagel is more moderate than Weber or Weidmann, and his English is fluent, a practical necessity for the job.

But Nagel has a political problem. A member of the SPD, the junior partner in Germany's coalition, he has publicly supported joint European debt issuance to finance defence projects. That put him at odds with Chancellor Friedrich Merz, who opposes mutualised debt. Nagel has, in the words of one Berlin insider, "stepped on the chancellor's toes more than once." In the German system, the chancellor's blessing is usually decisive for the Bundesbank president's elevation to Frankfurt.

Enter Jörg Kukies. A social democrat like Nagel but from the party's right wing, Kukies served as finance minister under Olaf Scholz. He holds a PhD in finance from the University of Chicago and ran Goldman Sachs's German operations. His English is impeccable. A person close to Merz described him as "an acceptable candidate for the chancellor." Lars-Hendrik Röller, Angela Merkel's former chief economic advisor and still a heavyweight in Berlin policy circles, has been floating Kukies's name.

The Schnabel question

Röller has also, according to Bank of France Governor François Villeroy de Galhau, been touting a German woman for the presidency. The obvious candidate is Isabel Schnabel, the ECB's head of market operations and a noted hawk. She is said to be interested. But the ECB's statutes bar anyone from serving more than one non-renewable eight-year term on the Executive Board. Schnabel's term runs to 2027. A legal workaround would be needed, perhaps an early departure from her current role, or a reinterpretation of the rules. A former Executive Board member said there is "no obvious reason why Germany should risk advancing her," given the legal uncertainty and the likelihood that other member states would view her as excessively hawkish.

The Dutch dark horse

Klaas Knot stepped down as president of De Nederlandsche Bank in June 2025 after 14 years. He chaired the Financial Stability Board from 2018 to 2024, overlapping with Draghi's ECB presidency. His credentials are deep: monetary policy experience, crisis management, global regulatory coordination. Last month, Lagarde offered conspicuous public support, saying Knot "has the intellect as well as the stamina and the rare and very necessary ability to include people."

The main objection to Knot is nationality. The Netherlands already has Frank Elderson on the Executive Board. In 2011, Lorenzo Bini Smaghi left early to make room for Draghi, so a precedent exists for an Italian stepping aside for an Italian. But the Dutch government would need to orchestrate a similar transition. Knot's bigger problem is visibility. He is out of the daily policy circus. A former Executive Board member noted: "He will need to find a way to stay visible and relevant to bridge the time." Knot is trying: he advises the European Stability Mechanism on strategy, the European Commission on central bank independence in accession countries, and spoke five times at the IMF annual meetings in October.

The von der Leyen constraint

Germany's calculus extends beyond the ECB. Ursula von der Leyen's term as European Commission president expires in 2029. If Berlin installs a hawkish German at the ECB in 2027, other capitals may demand a quid pro quo: a non-German Commission president two years later. That could push Germany to prefer a hawk from another country, Knot, perhaps, or a Spanish candidate, to avoid being asked to surrender the Commission early. The personnel politics of the EU's top jobs are inseparable. The 2027 ECB appointment will be negotiated alongside the 2029 Commission presidency, the 2027 European Council presidency, and the 2027 European Parliament presidency. No capital decides in isolation.

The Trump factor

Donald Trump's return to the White House adds a geopolitical layer. His administration has signalled scepticism toward multilateral institutions and European dominance of them. The IMF, the Financial Stability Board and the Basel Committee are all currently led by Europeans. If de Cos leaves the BIS for the ECB, the general manager role, prestigious if not powerful, becomes a bargaining chip. Washington could argue that Europe's share of global output no longer justifies its share of top jobs. The ECB's current leadership is aware of the risk. Whether it shapes the 2027 choice depends on how aggressively the Trump administration pushes, and whether European governments present a united front.