Christine Lagarde says early ECB exit ‘possible’ as election looms
The European Central Bank’s Christine Lagarde refused to rule out the possibility of an early end to her term as president as she considers entering French politics.
Lagarde, whose term as ECB President will end in October 2027, told the French newspaper Les Echos Early departure is “possible” ahead of the country’s presidential elections that year.
“I think a European voice should be heard in the French presidential debate,” Lagarde said. “If this debate were to offer a perspective that would diminish France’s place in Europe, I think it would be necessary to explain why this would be a painful path for our country and our citizens.”
Asked whether she would consider personally participating in the French Presidential campaign, supporting a candidate, or running on her own, Lagarde said: “I’m going to ask myself some questions.” he said.
Jordan Bardella, leader of the far-right National Rally party, is currently leading in the polls to replace President Emmanuel Macron, who took office in 2017 and is not running for re-election.
The first round of voting will take place in April, and if no candidate wins 50%, there will be a second round of voting between the top two candidates.
Macron faced the National Rally, then called the National Front, in the second round stages in both 2017 and 2022.
Bardella promised to reorganize France’s place in the European Union, promising to put the European Commission and the EU “at the service of nations again, not the other way around.”
The euro sold off in February after the Financial Times reported that Lagarde was considering an early exit from the European Central Bank. The ECB announced at that time that no such decision had been taken.
CNBC has reached out to the ECB for comment on Lagarde’s latest remarks.
Lagarde told Les Echos that she was committed to her role at the bank in the short term: “My mandate ends in October 2027. And I believe that my mission is to maintain price stability. As we enter a period of turbulence once again, I believe that the captain of the ECB ship must remain on board.”
Rising borrowing costs make French budget reform more urgent
Even if Lagarde remains at the European Central Bank until the end of her term, she can still participate in the Presidential debate.
Asked if she could have an “open debate” with some of the presidential candidates in the coming months, Lagarde said: “It’s very possible.”
“I would have a French and a European voice because I’m deeply committed to both,” he added. “I would tell them that France must play a decisive role in terms of the economic future of our continent. And without this European environment and these European roots, the economic outlook would be at least blurred.”
The French government is currently trying to pass controversial budget cuts of at least 4 billion euros ($4.6 billion) as it tries to rein in its debt and reduce the public deficit to the EU-required 3 percent of GDP by 2029.
French Finance Minister Roland Lescure recently reaffirmed the state’s commitment to the 5% target in the short term towards achieving this target.
Lescure told CNBC’s Charlotte Reed on Friday that debates about the 2027 election should not hinder passage of this year’s budget.
He said: “It’s a win-win situation where we focus on the budget, they let us pass it, we find a compromise…[not all parties will be happy with]But at least it will make sure we have a budget.
“On the other hand, there are great discussions about 2027 and beyond. We can relate both, [but] “If we don’t do that and one becomes a hostage to the other, a hostage to the budget of the campaign, it’s not going to work.”
“I hope the logic is good, we can manage to disassociate both. Let’s see.”
France has had five prime ministers since Macron’s re-election in 2022; This reflects an increasingly fragmented parliament that makes it difficult to pass economic reforms.
“France will need to make bold decisions on difficult issues. Presidential candidates have a duty to examine these issues and propose solutions,” Lagarde told Les Echos.
“And contrary to what I often hear from politicians, the French people are fully aware of the situation and expect a discourse of truth and solutions.”
