European Central Bank President Christine Lagarde will step down on 7 February 2027, the ECB said in a statement. That is nine months ahead of the end of her eight-year term, which would normally have ended in October 2027.
Lagarde informed the Governing Council and European Council President Antonio Costa of her decision. Costa said the process to appoint her successor will start immediately and "will proceed without delay, with a view to a timely decision." The ECB head is chosen by the leaders of the 21 eurozone countries.
Costa praised her tenure, saying that "through a global pandemic, a war in Europe, energy crises and inflation shocks, she has provided a steady and determined stewardship." Lagarde said she leaves "with a sense of good work done and an ECB that is fit for the future."
No reason has been given for the early departure. The source reports speculation that she is leaving early so EU leaders can choose her successor before French elections in the spring, which could bring a eurosceptic far-right victory that influences the choice.
The announcement comes ahead of an ECB meeting this week. The bank is expected to keep its deposit rate at 2.5% and signal that it is likely to rise again before year end. The source says the ECB has already raised rates twice since June to curb inflation fueled by the energy shock caused by the Iran war. The meeting is also expected to address the fiscal and political crisis in France, where French bond yields rose last week to their highest level in 25 years amid a deadlock over next year's budget.
Observers quoted in the source believe the French situation does not yet meet the strict conditions for the ECB's Transmission Protection Instrument, a tool that allows the bank to buy bonds of a eurozone member when yields rise uncontrollably.