Knot and de Cos: a two-horse race for the ECB

The race for the ECB presidency is officially a two-horse race. Spain and the Netherlands have nominated Pablo Hernández de Cos and Klaas Knot respectively, and the Eurogroup’s deliberations will begin as early as Monday. De Cos, who is described as a moderate dove, served as Governor of the Bank of Spain from 2018 to 2024 and has been at the helm of the Bank for International Settlements since July 2025. Knot, who headed the Dutch Central Bank from 2011 to 2025, is instead regarded as a pragmatic ‘hawk’, closer to the German monetary tradition. The choice will depend on the balance of power between the two major voting members, Germany and France (with Italy potentially playing a role), and on the allocation of the other seats on the ECB’s Executive Board: Germany’s Isabel Schnabel will step down in January, whilst Ireland’s Philip Lane, the ECB’s chief economist, will leave in May. If Knot were to become president, a fourth seat would become vacant, given that the Dutchman Frank Elderson is currently on the board. Germany might be willing to forgo the Dutch ‘hawk’, but only on condition that the next chief economist is German. France is prepared to back Knot in order to secure a French chief economist. However, it must weigh other factors: the current fiscal crisis could lead the Élysée to favour the Spanish ‘dove’, who is more open to unconventional measures. Italy, on the other hand, has not yet made its choice. Meloni has an excellent relationship with Merz, but backing De Cos may be more advantageous during a period of financial stress such as this, without such a choice being perceived as a favour to the socialist Sánchez. After all, De Cos was appointed central banker by Rajoy’s People’s Party government and is now backed by PP leader Feijóo, who, following the 29 November election, could lead the government alongside Vox. Germany’s political clout seems to be tipping the balance in favour of the Dutch hawk, but it is not certain that, with coordination amongst the other governments, the Spanish ‘dove’ might not come out on top. The good news is that, for the post-Lagarde era, both have the necessary expertise to lead the ECB.