FRANKFURT — The race to replace Christine Lagarde has reached fever pitch after she officially announced her intention to depart the European Central Bank in February next year.

The two leading contenders are familiar figures from the eurozone’s central banking circuit: Spain’s Pablo Hernández de Cos, a measured economist with a reputation for quiet authority, and Dutchman Klaas Knot, a former hawk whose years on the ECB’s governing council left a more complicated legacy.

A recent Bloomberg survey of economists gives de Cos a slender lead: 12 respondents picked him, against nine for Knot. The survey offers a snapshot of expert preferences, not a forecast of the outcome. EU leaders will make the appointment, with national claims and other ECB vacancies likely to shape negotiations.

The choices will also be influenced by horse trading over what will likely be a package deal with the opportunity to fill the two executive board seats that will be vacant in January and May.

Softly spoken de Cos

An economist with a Ph.D. from the University of Madrid, de Cos joined the Bank of Spain in 1997, moved to Frankfurt in 2004 to be an adviser to the ECB’s executive board, before returning to the Spanish central bank. He rose through the ranks to become governor, serving from 2018 to 2024. In this role he restored the Bank of Spain’s reputation after a series of missteps before and during the financial crisis.

His achievement was implicitly acknowledged by his appointment to two terms as chair of the Basel Committee for Banking Supervision, the global standard-setter for bank regulation. He now runs the Bank for International Settlements, the institution often described as the central bankers’ central bank.

His style is low-key: a modest dove, meaning that he is more attentive than hawks to growth and employment alongside inflation. Still, when inflation surged in 2022, de Cos backed the ECB’s shift toward higher rates. Equally, he has little time for governments that put off essential pension system reforms, having published a sharp critique of the Pedro Sanchez government while at the Bank of Spain. 

His case

De Cos has long been groomed by Lagarde’s predecessor Mario Draghi, whose voice continues to carry a heavy weight in European economic debates and may influence the preference of some countries as they mull who to place at the top of the Frankfurt institution.

As France faces mounting debt pressures, de Cos’ experience as a senior Bank of Spain economist during the eurozone crisis could convince EU governments that he is the best fit. Galo Nuño, vice dean and professor of economics at IE University and a former alternate member of the ECB governing council, called it “a huge advantage.”

His challenges

The political arithmetic, however, could work against the Spaniard. France is keen to secure the role of the ECB chief economist, which becomes vacant in May 2027. Some officials may want to avoid pairing the ECB presidency and chief economist roles with candidates from highly indebted countries.

With inflation above target and the eurozone having lived through a severe inflation shock in 2022, some leaders may prefer a candidate with a more clearly hawkish record.

Enter: Klaas Knot.  

Knot: Hawk turned pragmatist

Knot also has a strong economic background, boasting a Ph.D. from the University of Groningen. After early positions at the Dutch central bank, De Nederlandsche Bank, and the International Monetary Fund, he moved into senior roles at the Dutch Finance Ministry and returned to the DNB, which he led from 2011 to 2025. He has also chaired the Financial Stability Board, the global body tasked with monitoring risks to the financial system.

For much of Draghi’s presidency, Knot was a staunch hawk who publicly challenged the ECB’s stimulus measures. In September 2019, he called the package “disproportionate.”

His relationship with the ECB’s leadership was more harmonious under Lagarde. He supported both her pandemic crisis response package, PEPP, as well as the Transmission Protection Mechanism — a potentially more radical tool than any brought in under Draghi which allows the ECB to buy up unlimited debt of a single EU member country.

Knot remained an early advocate of raising rates when inflation took off but came to be described as a pragmatic hawk and team player.

His case

Supporters argue that a hawkish president could help the ECB support Southern European economies during a debt crisis while reassuring consumers and investors that the bank remains committed to price stability.

Knot’s former role as chair of the G20’s Financial Stability Board could also boost his case. Berenberg chief economist Holger Schmieding argued that “the question who may be best placed to deal with potential financial turbulences will likely play a key role in the choice of new ECB leaders.” This role was also Draghi’s springboard.

His challenges

Germany’s ambitions could be a stumbling block, as Northern European hawks will have had their turn with Knot. EFG Bank chief economist Stefan Gerlach said: “If Knot is appointed, then Germany can hardly argue that it is its turn to appoint the president after him.”

Some veteran governors still view Knot’s public break with Draghi as disloyal.

What happens now?

German Chancellor Friedrich Merz said a decision would be taken by year-end, with eurozone ministers set to gather under the banner of the European Council in mid-December.

When it comes who will win the race, the history could cut both ways.

Nuño, who has seen both candidates in action, said each brings monetary-policy expertise and the political pragmatism needed to manage the challenges ahead.

The choice, then, will turn on which mix of policy temperament and political arithmetic EU leaders want at the top.