European leaders have nominated Christine Lagarde as the successor to Mario Draghi for the role of President of the European Central Bank. Stock dropped following the announcement, as, if confirmed again by leaders in a few weeks, her appointment would likely see a continuation of Draghi’s cautious approach. Opinion is split among commentators, with some highlighting her political ability, but others pointing to her conviction for dereliction of duty by France’s High Court of Justice while Finance Minister, and her lack of public views on economic or monetary policy, even as Managing Director of the IMF.
In a surprise move, Germany’s Defence Minister, Ursula von der Leyen, has also been nominated as the European Commission’s President. It is not a move without controversy, as she was not one of the so-called Spitzenkandidaten who were previously leading the process and had taken part in a TV debate. Von der Leyen has been roundly criticised as Defence Minister in Germany, and former European Parliament President Martin Schulz Tweeted yesterday that she is ‘our weakest minister’. Former Defence Minister Rupert Scholz said that ‘The Bundeswehr’s condition is catastrophic’ under her management.
The President of the European Parliament will likely be nominated today, with potential candidates including Bulgarian socialist Sergei Stanishev and German centre-rightist Manfred Weber.
As these nominations continue, we can expect the euro to be volatile. We have also seen a raft of economic releases this morning, with services and composite PMI for Germany and the Eurozone coming in within expectations, with little change from the previous month. Tomorrow, we will see retail sales for the EU, and construction figures for Germany, both of which will provide an insight into the health of the economy.
