The Spaniard who is positioning himself to preside over the ECB

Madrid/Brussels"If I had anything to announce, you would be the first to know after my grandchildren," asserted the president of the European Central Bank (ECB), Christine Lagarde, when a Bloomberg journalist asked her if she would leave the institution to go to the World Economic Forum. The rumor about a possible early departure of Lagarde has been circulating for months in the economic press. In February, the Financial Times reported that she was considering stepping down before her term ended in October 2027, to allow Emmanuel Macron and Friedrich Merz to influence the choice of her successor before the 2027 French presidential elections.

Lagarde has not confirmed that she wants to bring forward her departure, but she has not completely closed off that possibility either. Meanwhile, member states have been outlining possible candidates to replace her. Spain aspires to maintain a significant role in European economic institutions after Luis de Guindos left the vice presidency of the ECB. Lagarde's departure would mean another Spanish name forming a tandem with former minister Nadia Calviño, current president of the European Investment Bank (EIB).

This is where Pablo Hernández de Cos comes into play, who, in fact, has already been part of the speculation, but now also has the public support of the Spanish government: President Pedro Sánchez confirmed on Tuesday that he supports a candidacy led by him: "Of course he has my support," he stated in remarks to Bloomberg TV. "He has the necessary capacity, knowledge, and leadership. It would be very positive for Spain and for Europe as a whole to have someone like him," reiterated Sánchez.

Hernández de Cos was governor of the Bank of Spain between 2018 and 2024 and today occupies the leadership of the Bank for International Settlements (BIS, known by economists as the central bank for central banks). However, he arrived at the Spanish supervisory body before Pedro Sánchez arrived at Moncloa. In fact, it was the former PP Minister of Economy Román Escolano who put his name on the table at a time when one of his maxims, according to those who coincided with him, was to rebuild the reputation of the organization, lost after the Great Recession and due to cases like the IPO of Bankia.

But the economic shock of COVID-19, structural reforms –such as that of the pension system and the labor reform–, sky-high inflation, and the war in Ukraine did not allow the organization to avoid the media spotlight under his mandate, nor did it avoid some political confrontation, particularly with the parties to the left of the PSOE.

For example, when in 2021 the Bank of Spain led by De Cos warned of a hypothetical negative impact of the increase in the minimum interprofessional wage (SMI). Today the State has an SMI of 1,221 euros per month and affiliation at historic highs. In fact, the then-governor did not dodge the main debates surrounding economic policy, focusing beyond monetary policy and banking supervision. Mind you, his circle has always highlighted his "technical discussion".

He is considered more of a dove than a hawk –economists of a more liberal bent– within the ECB, where he has earned the respect of many. However, he has also maintained a balance between the two positions when it has come to speaking about issues linked to fiscal sustainability and also the labor market. The warnings about deficit levels, for example, never disappeared with him at the head of the Bank of Spain.

Other candidates

Aside from Hernández de Cos, one of the candidates who has gained the most weight is the Dutchman Klaas Knot. An economist specializing in monetary policy, he led the central bank of the Netherlands between 2011 and 2025 and was part of the ECB's governing council for fourteen years.

His career within the Frankfurt institution has had two very different stages. During Mario Draghi's presidency, Knot openly opposed some of the Italian's stimulus policies, especially the massive purchase of debt and negative interest rates, which he considered disproportionate. With Christine Lagarde, on the other hand, he maintained a much more aligned relationship. Now, according to Reuters, France would be willing to support Knot to replace Lagarde, within the framework of a possible pact for a French candidate to occupy the position of chief economist of the ECB.

His candidacy, however, could clash with the resistance of Germany, which has its own candidate: Joachim Nagel, president of the Bundesbank since 2022. One of the arguments that play in Nagel's favor is that no German has ever chaired the ECB, even though Germany is the main economy of the eurozone. Against him is, among other factors, the fact that the presidency of the European Commission is already in the hands of a German, Ursula von der Leyen.

Reuters describes Nagel as a man of consensus and a moderate hawk. It also highlights that, despite representing Germany on the ECB's governing council, he has supported the creation of a European deposit insurance system, an initiative towards which Berlin has traditionally maintained a more reluctant position.