Lagarde says early ECB departure is possible before France’s 2027 vote

European Central Bank President Christine Lagarde has kept open the possibility of leaving her post before her term expires, a signal investors are watching because leadership uncertainty can move currencies and bond markets. The comments land as France heads toward a 2027 presidential race that could shape the country’s role in the European Union and its approach to public debt.

Lagarde told French newspaper Les Echos that an early exit from the ECB is “possible.” Her current term as head of the central bank runs until October 2027.

The ECB sets monetary policy for the euro area, including interest rates. Those decisions influence borrowing costs for households, companies and governments, and they can affect the euro’s exchange rate. A possible change at the top of the institution therefore matters beyond Brussels and Frankfurt.

Lagarde framed her comments around France’s political debate. She told Les Echos that a European perspective should be part of the 2027 presidential campaign. If the campaign includes ideas that would reduce France’s position in Europe, she said it would be necessary to explain why that route would be damaging for the country and its citizens.

Asked whether she might take a personal role in the French presidential campaign, either by backing a candidate or running herself, Lagarde said she was going to ask herself questions.

France’s election adds pressure

France’s next presidential election is scheduled for April 2027. If no candidate wins more than 50% in the first round, the top two candidates go to a runoff.

Jordan Bardella, leader of the far-right National Rally party, is currently ahead in polls to succeed President Emmanuel Macron, according to CNBC. Macron, first elected in 2017, is not seeking another term. He faced National Rally, then known as Front National, in the final rounds of both the 2017 and 2022 elections.

Bardella has called for a shift in France’s relationship with the EU. He has said he wants the European Commission and the EU to be “back at the service of nations and no longer the other way around.”

Markets have already reacted to speculation about Lagarde’s future. CNBC reported that the euro fell in February after the Financial Times said Lagarde was considering an early ECB departure. The ECB said at that time that no decision had been made. CNBC said the ECB declined to comment on Lagarde’s latest remarks.

Lagarde also told Les Echos that she remains focused on her current job in the near term. She said her mandate runs until October 2027 and that her mission is to maintain price stability, meaning keeping inflation under control. In a period of renewed turbulence, she said the head of the ECB should stay in place.

Budget fight in Paris

France is also under pressure to tighten its public finances. The government is trying to pass budget cuts of at least 4 billion euros, or $4.6 billion, as it works to lower debt and bring the public deficit down to the EU’s 3% of gross domestic product benchmark by 2029, according to CNBC.

French Finance Minister Roland Lescure recently reaffirmed a short-term target of 5% on the way to that EU goal. He told CNBC’s Charlotte Reed that the 2027 campaign should not block passage of this year’s budget, saying lawmakers should separate the budget process from the presidential debate.

France’s parliament has become harder to manage since Macron’s 2022 re-election. CNBC reported that the country has had five prime ministers since then, a sign of political fragmentation that has complicated economic reform.

Lagarde told Les Echos that France will need to make difficult choices and that presidential candidates should examine those issues and propose answers. She added that French voters understand the situation and expect honesty and solutions.

This story draws on original reporting from CNBC.