On Tuesday, the Council of the European Union officially appointed Christine Lagarde, Managing Director of the International Monetary Fund, as the next President of the European Central Bank.
Lagarde will succeed Mario Draghi. Lagarde has headed the IMF since 2011.
"I am honored to have been nominated for the Presidency of the European Central Bank," Lagarde said in a statement. "Against this background, and in consultation with the IMF Executive Committee Ethics Committee, I have decided to temporarily abandon my responsibilities as IMF Managing Director during the nomination period."
The nomination of Lagarde is now entering into a vote on the wider European Parliament.
If confirmed, Lagarde would take over a central bank struggling to break economic growth in Europe. Last month, Draghi announced that the ECB would give further impetus should the economic situation in the region deteriorate further. According to IHS Markit, growth in the European manufacturing sector deteriorated in June for the fifth time in a row.
"Lagarde is expected to remain largely cautious on monetary policy while urging the tax authorities to play a more active role in promoting eurozone growth," said Krishna Guha, head of global affairs Politics and central bank strategy at Evercore ISI, in a note. "In particular, we believe it will support a final great game from Draghi in September: a loosening package that includes both a 1
The Council has also nominated German Defense Minister Ursula von der Leyen for the presidency of the European Commission. Belgian Prime Minister Charles Michel has also been nominated for the post of President of the European Council.
Given the fragmented outcome of the European Parliament elections at the end of May and the multitude of top jobs to be filled before him, the decisions this year were particularly difficult at the end of the year.
In the May elections, European citizens voted mainly for EU pro-parties. However, the center-right group of the European People's Party (EPP), which has pushed ahead with EU policy over the last four decades, lost much support in the previous elections. As a result, there was a stronger presence for liberal legislators, Eurosceptics and the Greens.
The 28 heads of state had to consider the outcome of these elections in the appointment of the next president of the European Commission – who will take power on 1 November by President Jean-Claude Juncker. In addition to the political affiliation of the next Commission President, the various EU leaders had to deal with gender and nationality.
– Jeff Cox of CNBC contributed to this report.