Three of six ECB Board seats may turn over by May 2027, but governments cannot trade the portfolios

The ECB presidency race has two candidates, Spanish and Dutch. Three Board seats may open by May 2027, but the Board, not governments, assigned portfolios in 2012.

Europe is picking one ECB president, but it may also refill three of the six Executive Board seats by May 2027. Governments can negotiate who fills those seats. The Board, not the governments, decides who runs which portfolio.

The turnover is large. The president leaves on 7 February 2027. Isabel Schnabel is reported by Le Monde alone to leave in early January. Philip Lane's eight-year term ends in May 2027. Three seats out of six is 50%. A seat swap, a deal that trades support for the presidency against the other two vacancies, would need someone able to deliver portfolios. Governments can negotiate who gets appointed, but they cannot compel the ECB to assign the portfolios they propose.

No Franco-German fight on the record

Christine Lagarde announced on 29 October that she will step down on 7 February 2027. By the 6 November deadline the Eurogroup president received two candidacies: Pablo Hernandez de Cos of Spain and Klaas Knot of the Netherlands. Paris and Berlin put up no one.

The record shows no clash between the two capitals, and nothing on the record from Emmanuel Macron, Friedrich Merz or Joachim Nagel names a preferred candidate.

Le Monde reported on 10 November that it was unclear where France or Germany stood. It says the Elysee "plans to back" de Cos and a chief economist chosen by Berlin, and that Berlin's position is "not yet fully settled". Those are Le Monde's claims about plans, and neither government has confirmed them. They describe an open process.

Knot's pitch cuts across the reported Paris and Berlin arrangement. Le Monde says Knot gave the Financial Times an interview on 9 November pledging vigilance on interest-rate differentials against low-debt members such as Germany. It adds that his signals are aimed at Paris, even at the risk of losing Berlin. Spain's Carlos Cuerpo described de Cos as someone who "knows the ECB inside out".

Six countries can block a package

Le Monde says eurozone leaders "must agree on a trio". It cites an unwritten rule that France, Germany and Italy always hold a seat on the Board. It says Laurence Boone could take the market-operations seat. Schnabel's departure rests on Le Monde alone, and Lane's date is eight years from his June 2019 start.

Time is short. From 12 November there are 49 days to the year-end target for finishing the process, which Eurogroup president Pierrakakis voiced through Le Monde. There are 87 days to Lagarde's exit. The voting rule requires at least 16 of 21 euro countries holding at least 65% of the euro-area population. Twenty-one minus 16 plus 1 gives six countries that can block. Two capitals are two votes of 21, so any package needs wide agreement.

Settling the presidency first and the other seats later would leave leaders more room than tying all three together.

Seats and portfolios

The European Council appoints Board members. The ECB's own announcements show the Board dividing the work itself.

The 2011 to 2012 handover is the closest test. Nicolas Sarkozy said in April 2011 that Silvio Berlusconi had promised Lorenzo Bini Smaghi's seat to a French candidate, Reuters reported. Mario Draghi took office as president on 1 November 2011. Bini Smaghi announced on 10 November that he would leave at year-end. France nominated Benoit Coeure two weeks later.

France got the seat, but not the say on the portfolio. The ECB's allocation of 3 January 2012 gave Coeure Market Operations from 1 March. He took it over from Spain's Jose Manuel Gonzalez-Paramo, "within the framework of its collective responsibility". The Board made that call. France secured representation, but the Board set the remit.

The 1998 package

Packages can be struck, and 1998 is the example. At the May summit Blair told the Commons that Wim Duisenberg was nominated for eight years and France's Christian Noyer would be vice-president for four. Governments packaged the president with a second Board post. The deal was workable because the Council could award both offices.

The part that depended on a person did not travel as well. The Irish Times reported that France agreed on the condition that Duisenberg would step down halfway through his term. Blair told MPs that "no specific date was given". Trichet's term began on 1 November 2003.

The same limit applies now.

Leaders could pair a Spanish or Dutch president with a German chief economist and a French operations chief. The pairing would still not bind the Board's allocation, and it would hold only as long as the Board agreed to honour it.

The strongest opposing case is that Berlin and Paris are already bargaining. Le Monde reports that the Elysee plans to back de Cos and a chief economist chosen by Berlin, and Sarkozy's April 2011 remark about Bini Smaghi's seat shows that governments do attempt such trades.

That case holds for seats. It stops short of portfolios: Merz, Macron and Nagel have made no on-record statement backing a trade, and the Board, not the governments, allocated the portfolios in the 3 January 2012 Coeure allocation.

Year-end and May

If the Eurogroup has agreed one candidate by the 31 December target, the presidency will have moved ahead of the other seats. After Lane's term ends in May 2027, the ECB's published allocation shows who is chief economist and who holds Market Operations. Le Monde's reported plan implies a German and a French member. A different split would show that any understanding over portfolios was not binding, not that no bargain was attempted. Until then, the 2012 precedent suggests governments choose the names and the Board chooses the jobs.