French central bank governor Villeroy unexpectedly announced his resignation, Macron firmly grasps the power to appoint his successor.

The Governor of the Bank of France, Villeroy, unexpectedly announced that he will step down early this June. This decision breaks the expectations of his term arrangement by the public and also means that the next Governor of the Bank of France will be appointed by the current President Macron, rather than by the right-wing camp person who may win the 2027 presidential election. This resignation occurred more than a year before Villeroy's second term was originally scheduled to end in October 2027, and also about half a year before the next presidential election in France. The market generally believes that this timing has significant political implications, as if Villeroy had stayed until the end of his term, the appointment of the next Governor of the Bank would have fallen into the hands of the new president. In his statement on Monday, Villeroy stated that he was invited to serve as the head of a public foundation dedicated to helping troubled youth, which was an "irresistible opportunity," and emphasized that the resignation decision was entirely for personal reasons. In a letter to the Bank of France employees, he mentioned that although there was still more than a year until the end of his second term, "I believe I have completed the core mission," and also acknowledged that this decision "may come as a surprise to everyone." As the Governor of the Bank of France, Villeroy is also a member of the European Central Bank's Governing Council and one of the most influential monetary policy makers in Europe. His early departure comes at a relatively stable time in France, as the 2025 budget has finally been approved. In contrast, in the United States, the political wrangling over the succession of the Federal Reserve Chair is raising concerns among investors about the independence of central banks. Analysts point out that Villeroy's early resignation provides President Macron with an important window to continue influencing the European monetary policy landscape after the end of his presidential term. This move is expected to provoke dissatisfaction among potential competitors in the 2027 presidential election, as they had originally had the opportunity to personally appoint the next Governor of the Bank of France. According to French legal procedures, the nomination of the central bank governor must undergo hearings by the National Assembly and Senate finance committees. If a total of three-fifths of the two committees vote against, the presidential nomination will be rejected. Although the far-left and far-right increased their seats in the relevant committees after the 2024 elections, the total number is still not enough to form a majority to reject. Villeroy stated that there is "ample time from now until early June to smoothly organize the handover in accordance with the rules of the Republic." He has informed Macron, senior French government officials, and the ECB President Lagarde of this decision. Lagarde stated in her statement that she deeply respects Villeroy's years of service to France and Europe with loyalty and diligence. At the level of the European Central Bank, this personnel change also intensifies expectations for policy adjustments. Both Lagarde and the ECB's Chief Economist will reach the end of their terms next year, and the market is even beginning to speculate whether there might be earlier and more systematic succession arrangements at the top of the ECB to coincide with France's domestic political cycle. In terms of monetary policy stance, Villeroy has long been seen as one of the "dovish" representatives within the European Central Bank. Recently, he warned that the central bank must maintain "flexibility" on interest rates, and pointed out that the risk of inflation remaining below target is higher than the risk of overheating inflation. Against the backdrop of inflation in the Eurozone nearing the 2% target, the ECB has kept rates unchanged since June last year. In terms of potential successors, Macron has a fairly wide range of choices. Historically, the Governor of the Bank of France has mostly been appointed from high-ranking officials in the finance ministry system, almost all of whom have graduated from the National School of Administration (ENA) since the 1980s. Potential candidates include the current Finance Minister and several senior officials who have held key positions in the French government or European institutions.