EU aims to pick new ECB chief by year-end

Eurogroup chief Kyriakos Pierrakakis announced on Monday that the European Union aims to appoint a new head of the European Central Bank (ECB) by the end of the year. This follows Christine Lagarde's announcement that she would step down in February.

Two candidates are currently in the running to replace Lagarde: Klaas Knot, the former Dutch central bank chief, and Pablo Hernandez de Cos, head of the Bank for International Settlements (BIS). Pierrakakis stated that Dutch and Spanish ministers will present their candidates at a Eurogroup meeting of euro area finance ministers.

Former Dutch central bank chief Klaas Knot and Spain's Pablo Hernandez de Cos are seen as strong contenders. Knot is praised for his deep knowledge of the ECB and his ability to find consensus, while Hernandez de Cos is recognized for his extensive experience in leading institutions such as the Bank of Spain and BIS.

The selection process will involve negotiations, as the ECB executive board members Isabel Schnabel and Philip Lane will also need to be replaced. Spanish economy minister Carlos Cuerpo supports Hernandez de Cos, highlighting his years of experience. Dutch finance minister Eelco Heinen also backs Knot, emphasizing his comprehensive understanding of the ECB's mandate.

Irish finance minister Simon Harris, who holds the rotating EU presidency, expressed hope that Lagarde's successor would be chosen by December. He underscored the importance of a swift and well-qualified appointment, stating that it is crucial for the ECB.