ECB President Lagarde Hints At Major Move Into French Politics That Could See Her Early Departure From The Post

ECB President Christine Lagarde could leave her post before her tenure ends ahead of the French presidential elections.

Speaking to local outlet Les Echos, she said such a scenario is “possible,” adding that a “European voice must be heard in the French presidential debate.”

“If this debate were to present a perspective that diminishes France’s place within Europe, I think it would be necessary to explain why this would be a painful path for our country and our citizens,” she added.

Lagarde was then asked if that means actively supporting a candidate or running for president herself. “I’m going to ask myself some questions,” she said.

CNBC noted that Jordan Bardella, head of the right-wing National Rally, is the current front-runner to replace Emmanuel Macron, who is not running for reelection after 10 years in the post.

Bardella has vowed to review France’s stance in the European Union, saying he will put the European Commission and the bloc itself “back at the service of nations and no longer the other way around.”

Lagarde said that, in the meantime, she is focused on her current role. “My term ends in October 2027. And I believe my mission is to maintain price stability. As we are once again in a period of turbulence, I believe the captain of the ECB ship must remain on board,” she said.

The bank in June hiked interest rates for the first time since 2023, citing the pressures from the war in Iran. The key rate now stands at 2.25%.

Markets widely expected the body to make such a move, claiming that the decision is “robust across a range of scenarios mapping out how the shock might evolve and affect the medium-term outlook for the euro area.”

The ECB also raised its inflation forecast. It now expects it to average 3% this year before dropping to 2.3% in 2027 and 2% the year after. The outlook has changed as a result of an expectation of higher energy prices.

At the same time, the body reduced its economic growth forecast, now expecting a 0.8% expansion for the year, 1.2% for 2027 and 1.5% for 2028.

Since then, Joachim Nagel, the president of Germany’s central bank, said inflation is at risk of staying above target despite the ceasefire between the U.S. and Iran.

Speaking to CNBC, Nagel said the “energy price shock” is “still in the system.” He went on to say that the ECB’s decision to raise its key interest rate for the first time in three years was correct.