Pedro Sánchez's government will support the candidacy of former Governor of the Bank of Spain, Pablo Hernández de Cos, for the presidency of the ECB, according to market sources. Christine Lagarde's term expires in October 2027.
The government of Pedro Sánchez will support the candidacy of Pablo Hernández de Cos for the presidency of the European Central Bank (ECB), as reported by the newspaper Expansión. This news confirms what El Debate published in May of this year. The former governor of the Bank of Spain is one of the best-placed names to succeed Christine Lagarde, whose term officially concludes in October 2027.
Hernández de Cos, who served as governor of the Bank of Spain from 2018 to 2024, enjoys undeniable international prestige. He appears as a favourite in the betting markets of Reuters, Bloomberg, and the Financial Times. However, the government's backing is not without controversy, as during his time at the helm of the Spanish supervisor, Hernández de Cos maintained a critical stance towards the government's economic policies.
The government's support, a double-edged sword
Sánchez's government has not officially confirmed its support, but market sources indicate that the decision has been made. Nevertheless, the backing of the Spanish government may not be an advantage. Sánchez does not have a good relationship with the leaders of Italy (Giorgia Meloni), Germany (Friedrich Merz), or France (Emmanuel Macron, who is on his way out), which could reduce support for De Cos's candidacy in the European Council.
Germany and Spain are the two major European countries that have never had a president of the ECB. However, Germany already holds the presidency of the European Commission with Ursula von der Leyen, making it difficult for a German to also lead the central bank. This places Spain, and Hernández de Cos, in a favourable position for geopolitical balance reasons.
If the election is based on technical criteria, De Cos has an advantage. In that scenario, Italy would be a natural ally, according to market sources. But politics weighs heavily, and the lack of harmony between Sánchez and Meloni could complicate matters.
De Cos's personal relationships with the government
The main hurdle for government support is the that the Bank of Spain maintained with the government during De Cos's term. The former governor openly criticized some of the government's measures, which caused discomfort in Moncloa. However, sources close to the former governor assert that the relationship with the current Minister of Economy, Carlos Cuerpo, is correct, as they have known each other for twenty years. He also maintains a good rapport with Manuel de la Rocha, head of the Economic Affairs Office of Moncloa, whom he met when De la Rocha was part of the PSOE's economic team.
Opinions in the market are divided. Those who believe the government is hostile to De Cos point to the opposition from the Minister for Digital Transformation, José Luis Escrivá, as well as from Cuerpo and De la Rocha. Others, however, argue that the government respects his independence, even if they do not share his criticisms. The truth is that De Cos frequently met with Pedro Sánchez during his time as governor, suggesting a professional relationship, at the very least, correct.
Time is running out. If Lagarde decides to step down before October 2027, candidacies could take shape by late 2026 or early 2027. Meanwhile, Hernández de Cos remains the most talked-about name, but the path to Frankfurt is fraught with political obstacles. For readers interested in the European economy, this candidacy is key: a Spanish president of the ECB would imply greater sensitivity to the problems of southern Europe, such as inflation or debt. We will have to wait.
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