Merz lines up talks with both frontrunners to succeed Lagarde at the ECB

The first appointment in the sequence is the seat Germany is vacating. Isabel Schnabel's markets post comes free in early January ^[6], and eurozone finance ministers could begin discussing a successor as soon as next week ^[7]. Schnabel is leaving for a post at the International Monetary Fund ^[16]. According to Bloomberg's sources, her portfolio and Philip Lane's job as chief economist are Berlin's alternatives to the presidency ^[14]. Lane's term ends in May ^[4].

That leaves Germany with a choice about order. Claiming the markets seat in January puts a German on the board early, on a known date. Waiting for Lane's post keeps the chief economist job in reach. It also leaves Germany's claim inside a negotiation that has to settle who succeeds Lagarde. Bloomberg lists Markus Brunnermeier of Princeton, Ulrike Malmendier of Berkeley, Tobias Adrian, who just left the IMF job Schnabel is taking, and former finance minister Joerg Kukies as possible German nominees ^[15].

The case for one package came from Athens. Greece's premier predicted last week that leaders would make "a grand bargain" to fill all three vacancies at once ^[5]. The Schnabel and Lane seats both open before Lagarde's term is due to end in October 2027 ^[20], and Lagarde said this week she would not rule out leaving "a few months" early ^[10]. Under a bundle, the January appointment is made with the presidency already in view. A dispute over the presidency could then hold up a seat the ECB has already asked governments to fill ^[6].

Paris is the other half of any deal. Bloomberg describes Germany's position as crucial and names Emmanuel Macron as the other key player ^[8]. France faces heightened bond-market scrutiny while his government struggles to pass a budget ^[8]. Bloomberg named two pressures to settle quickly: this week's bond turmoil, if it lasts ^[18], and possible Spanish elections before the end of the year after a parliamentary defeat for Pedro Sanchez ^[19]. Sanchez and the Dutch prime minister each endorsed their own national candidate last week ^[11]. De Cos, a former Bank of Spain governor, is general manager at the Bank for International Settlements, and Knot is a former Dutch central bank chief ^[12].

Two meetings with a chancellor do not settle the presidency. The account rests on people who asked not to be identified ^[1]. A German official, the French finance ministry and Knot declined to comment, and de Cos was not immediately available ^[17]. Bloomberg's own claim is narrower: it calls the meetings the clearest evidence yet of movement behind the scenes ^[3]. The January seat is different, because it has a date and a formal request from the ECB behind it ^[6].

The report does not say how Knot and de Cos differ on monetary policy. The decision due this quarter is who replaces Schnabel ^[6]. Next quarter, whichever post Germany takes or passes up in January will decide what is left to trade when Lane's term ends in May ^[4].