Speculation grows that former DNB chief Knot will take over European Central Bank role

As the European Central Bank (ECB) President Christine Lagarde, 70, is scheduled to leave office on February 7, the former Dutch Central Bank (DNB) head Klaas Knot, 59, is still widely seen as the front-runner up, according to Bloomberg’s poll of economists. The speculation that Knot might replace Lagarde is additionally fueled by Bloomberg's earlier reporting of German Chancellor Friedrich Merz having a meeting with Knot and the other leading contender, former Spanish central bank president Pablo Hernández de Cos.

Lagarde had previously signaled she might not serve the full term. By stepping down now, she would allow French President Emmanuel Macron and Merz a chance to choose her successor. Since Macron’s term is to end in April 2027, by leaving in February, Lagarde gives him and Merz a seat at the decision table.

“The Dutch government supports him for any kind of vacancy in several European institutions, and if it’s the ECB, let’s see who is the best candidate,” Dutch Prime Minister Rob Jetten told Bloomberg Television in New York. “But I think for a lot of European countries, he will be a perfect fit.”

The PM said that Knot was “very successful” when in charge of the Netherlands’ central bank. He called Knot “very pragmatic," saying that he brings with him the expertise gained after the eurozone's debt crisis.

But the stability of Prime Minister Jetten’s first Cabinet has been tenuous from the start, as the three-party coalition of D66, VVD, and CDA does not command a majority in either house of Parliament. Provincial elections are scheduled to take place in March, which will also shake up the composition of the Eerste Kamer, the upper house of Parliament.

The center-right coalition is being pushed into a position where it may need to choose between either working with both left-wing party PRO and centrist party Volt to pass a budget for next year or instead going for an alliance with hard-right parties demanding stricter policy on asylum and abortion but looser policies on nitrogen emissions.

Lagarde has been the president of the ECB since November 2019. She was France’s first female finance minister and the first woman to become ECB president when she took the job in 2019.