Eurozone governments are gearing up for one of the biggest leadership reshuffles in the European Central Bank’s 28-year history, with a “grand package” over its three top roles expected to be agreed by the end of December, according to people familiar with the matter.

The leadership overhaul will be necessary as ECB president Christine Lagarde is expected to announce later this year that she will leave the ECB by early 2027, before the next French presidential election. The eight-year terms of chief economist Philip Lane and executive board member Isabel Schnabel will also expire next year.

The “aim is to have a grand package agreed by the end of the year”, one EU diplomat briefed on the talks told the FT.

“Strategic consultations are happening, it’s true,” said another diplomat with knowledge of the negotiations. “Everyone is aware that there are a lot of big economic jobs we need to make a decision on.”

The looming reshuffle comes at a time of volatility in global bond markets as more than six months of war in the Middle East drives up governments’ debt-servicing costs and exacerbates concerns about budgetary strains across the EU. The ECB has lifted its key interest rate twice this year as it prepares for “longer-lasting” inflation well into 2027, with the US Federal Reserve set to consider its own response this week.

April’s elections in France are also looming large for European leaders, with far-right leader Marine Le Pen the frontrunner to succeed President Emmanuel Macron.

“The decision on the ECB president is a portfolio decision,” one senior official involved in the matter said, adding that it was “the most important personnel decision” in Europe until 2029, when European Commission president Ursula von der Leyen’s term expires.

The ECB’s new leadership needed to consist of “strong people with different profiles” able to “act effectively over the coming years”, the senior official added.

A combination of unwritten rules, national vanities and hidden interdependencies means the race between the two main contenders to succeed Lagarde – Pablo Hernández de Cos, who leads the Bank for International Settlements, and former Dutch central bank president Klaas Knot – is wide open.

Bundesbank president Joachim Nagel, who behind closed doors has also expressed interest in the job, is seen as an unlikely pick as it would be unprecedented for two German nationals to lead two of the EU’s most important institutions – the ECB and the European Commission. Several people familiar with the matter also told the FT that support in Berlin for Nagel was lukewarm.

The German government is currently considering candidates to put forward as the ECB’s next chief economist – considered the second most important position after the president.

An ECB president from another country “balanced by a strong German chief economist … is seen as a potential blueprint in Berlin”, said one person with first-hand knowledge of the discussions.

Princeton economist Markus Brunnermeier, Stanford professor Monika Piazzesi and former senior IMF economist Tobias Adrian are among the names that are being discussed in Berlin for ECB chief economist, three people briefed about the matter told the FT.

A German push for the role would put the Eurozone’s largest economy at loggerheads with France, which is also eyeing the key role. Paris is discussing two candidates: Banque de France vice-president Agnès Bénassy-Quéré and former OECD chief economist Laurence Boone, currently head of corporate and investment banking in France at Santander.

But a French chief economist combined with a Spanish president would be “hard to imagine” for Berlin, said three people familiar with the German government’s thinking, while Paris would probably block a Dutch president and a German chief economist.

Several observers warned that a surprise third candidate might emerge at the eleventh hour, like in 2019 when Lagarde was suddenly put forward by Macron as the lead contender for the ECB top job.

David Marsh, chair of think-tank OMFIF, suggested in a blog post recently that former French central bank governor François Villeroy de Galhau could be an unexpected contender for ECB president.

The FT reported in February that Lagarde was expected to leave before her eight-year term ends in October 2027. After the outbreak of the Iran war, she told Bloomberg TV that an early departure was not an option during a period of economic turmoil. In June, however, she told French newspaper Les Echos that the situation could change if conditions improved.

At the ECB’s latest press conference last week, Lagarde said there was “nothing to report” about her future.

Lagarde has been talking to the World Economic Forum for more than a year about becoming the next chair of the body behind the annual meetings of politicians and businesspeople at Davos in Switzerland. Two people told the FT that a WEF board vote on her appointment could happen next month or in November, with Lagarde potentially announcing her departure from the ECB at its October monetary policy meeting.

The German and French governments, the ECB, Bundesbank and WEF all declined to comment. Lagarde, Schnabel and Nagel declined to comment through spokespeople. – Copyright The Financial Times Limited 2026