Monetary policy | Woman in the financial establishment

Christine Lagarde has been at the helm of the ECB since 2019. Photo: dpa/Arne Dedert Ultimately, Christine Lagarde gave in to pressure from financial circles and cleared the air: In February 2027, she will prematurely resign from her position as President of the European Central Bank, as the ECB announced on Thursday in Frankfurt am Main. No information was given about Lagarde's reasons or future.

A rumor circulated for months that the 70-year-old was about to move to the World Economic Forum in Davos. This caused discontent in the ECB Council, the decision-making body of the central bank responsible for the euro area countries. Critics accused the former French finance minister of only doing her job half-heartedly, at a difficult time for monetary policy. The denials of the synchronized swimmer, who was nationally successful at a young age, about this change have recently sounded more and more half-hearted.

Lagarde comes from Normandy. She studied social law at the Institut d'études politiques in Aix-en-Provence and later earned a diploma in labor law at the University of Paris X-Nanterre before taking a job at a billion-dollar law firm. From 2005 she held various ministerial positions in conservative-led governments. She received a lot of praise for her clever actions as head of the finance department during the global financial crisis from 2008.

As Lagarde once said, when she started her career in the late 1970s, she was repeatedly told that she would never make it to the top as a woman. This gave her the lie several times in the financial establishment: she was the first woman to become director of the International Monetary Fund (2011-2019), and the same applies to her subsequent position at the top of the ECB. There it had to struggle above all with severe inflationary tendencies in the wake of the Ukraine war. Their less-than-excited approach to the problem with moderate, announced interest rate increases and cuts was largely welcomed. Pushing forward with the introduction of the digital euro also falls within Lagarde's term of office.

The ECB is currently dealing with inflation figures above the target again. However, interest rate increases would damage the already weak economy and could provoke financial upheaval. Especially in France, where the already very high interest rates on government bonds are putting a strain on budget policy. An impending takeover of power by the extreme right and the current government crisis in the wake of mass protests could make the situation even worse. The ECB Governing Council would be able to easily ease tensions with an extensive bond-buying program, but unlike her predecessor Mario Draghi, Lagarde is more inclined towards a conservative monetary policy. And perhaps, as a French woman, she doesn't want to expose herself to accusations of bias.

Her early departure - the term of office actually runs until the end of October 2027 - is likely to have a further political background: the succession must be settled before the presidential election in France. And so without the Euro-critical ultra-right around Marine Le Pen being able to intervene. Incidentally, so far only men have been considered as successors.

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