The succession of Christine Lagarde, who may step down as President of the European Central Bank before the end of her term next October, has taken an unexpected turn. The battle is no longer really about the presidency, but about the post of Chief Economist, which will become vacant in May 2027. With three terms on the Executive Board expiring in the same year, the capitals hope to settle everything in a single package, and negotiations have already begun.
Paris is reportedly prepared to back the former head of the Dutch central bank, Klaas Knot – a northern ‘hawk’ – for the presidency, in exchange for the post of chief economist. Berlin is taking the opposite tack and is backing the more accommodative Spanish Director-General of the Bank for International Settlements, Pablo Hernández de Cos, for the same post. Both capitals stand to lose out on the presidency: France has already held it twice, whilst Germany already holds two key posts, at the Commission and in banking supervision.
For former holders of the post, such manoeuvring undermines the ECB’s independence. “This is unacceptable,” states Otmar Issing, chief economist from 1998 to 2006, who points out that the allocation of responsibilities within the Executive Board is decided internally. His successor, Jürgen Stark, goes further: “Appointing the chief economist is not a matter for governments.” Peter Praet, who held the post from 2011 to 2019, calls on Christine Lagarde to state this clearly, rather than letting political horse-trading decide the matter.
The three men also emphasise that the two capitals may be missing the point. The chief economist’s influence depends heavily on the current president: as a lawyer by training, Christine Lagarde relied more heavily on Philip Lane than Mario Draghi had done on Peter Praet, and both Knot and Hernández de Cos have sufficient expertise to manage without such a liaison. Praet even believes that the Head of Market Operations, a role currently held by the German Isabel Schnabel, could carry just as much weight during a period of severe financial tensions. Her term ends in late 2027, but the German press speculates that she may leave early to join the International Monetary Fund. Politico
Europe
🇷🇺 Russia - 🇺🇦 Ukraine • Russian strikes carried out during the night from Wednesday to Thursday left more than twenty people injured, including children, in Kyiv and Odessa, where a 19-storey residential block was hit. The attack involved nearly 160 drones and several types of missiles, with damage reported in eight regions, notably to energy infrastructure in Sumy and Odessa. This morning, five people, including three children, were injured by a drone in the Kyiv region. On the Russian side, a Ukrainian drone attack damaged an oil refinery in Yaroslavl.
🇷🇺 Russia - 🇺🇸 United States • The House of Representatives has passed, by 262 votes to 159, a wide-ranging package of sanctions targeting Russia’s energy and defence sectors, as well as its ‘ghost fleet’ – a first for the US. The bill, which had already been passed by the Senate in early August, gives Donald Trump the power to impose tariffs of up to 100 per cent on the five main buyers of Russian hydrocarbons, including China and India. Volodymyr Zelensky sees this as “an extremely powerful tool” to force Moscow to make peace.
🇫🇷 France – 🇷🇺 Russia • The EU-27 failed today to reach agreement on new European sanctions, with Paris calling for the removal of the Russian-Uzbek billionaire Alisher Usmanov from the list on “national security grounds”. Luxembourg, for its part, is calling for Mikhail Fridman to be removed, whilst several Nordic and Baltic countries categorically refuse any such removal. If no agreement is reached by next Wednesday, the measures targeting some 3,000 individuals and entities would lapse.
🇦🇲 Armenia - 🇷🇺 Russia • Armenian Prime Minister Nikol Pashinyan has stated that he has no objection to Russia closing its 102nd military base, which “contributes nothing to Armenia’s security”. Located near the Turkish border, this facility remains a major symbol of Russian military influence in the South Caucasus.
🇷🇺 Russia • Polling stations opened today for three days of parliamentary elections. Only parties supporting the Kremlin were allowed to stand.
🇫🇷 France • On Friday, Emmanuel Macron met with candidates vying to succeed him to brief them on confidential intelligence regarding the Russian hybrid threat and the fuel price crisis.
🇸🇪 Sweden • The Speaker of the Riksdag has tasked Social Democrat Magdalena Andersson with forming a government, following her bloc’s narrow victory in last Sunday’s general election. Her main challenge will be to bring the centrists and the radical left together within a single coalition.
🇨🇦 Canada – 🇪🇺 European Union – 🇺🇸 United States • Donald Trump described Ursula von der Leyen’s proposal to make Canada the EU’s first associate member as “laughable”, threatening to impose heavy tariffs or sever trade ties with Europe if he views it as a hostile act.
🇵🇱 Poland - 🇺🇸 United States • Donald Trump reported “significant progress” towards establishing a US Army base in Poland, praising President Karol Nawrocki’s “courageous leadership”. Warsaw says it is ready to continue efforts to strengthen defence cooperation, with the location due to be announced shortly. US soldiers are currently stationed in the country under NATO’s rotation system.
🇩🇪 Germany – 🇪🇺 European Union • Several capitals, led by Berlin, called on Dublin on Friday to introduce a European tax on the super-profits of oil companies, fuelled by the war in the Middle East. German Finance Minister Lars Klingbeil criticised the Commission for its “reluctance” to take up the issue, whilst Commissioner Valdis Dombrovskis pointed out that Member States can already act independently. Irish Minister Simon Harris considers de-escalation in the Middle East and the reopening of the Strait of Hormuz to be far more effective.
Middle East
🇸🇦 Saudi Arabia - 🇾🇪 Yemen • A Yemeni national residing in the kingdom was killed on Thursday during the interception of a drone attributed to the Houthis in the Taif governorate. A Saudi woman and a Pakistani man were injured in the same operation. Riyadh had already reported 86 people injured this month, whilst the rebels claim there have been 40 Saudi air strikes on the provinces of Taiz, Marib and Hajjah in the space of 24 hours.
🇾🇪 Yemen • The intensification of fighting over the past two weeks has displaced at least 112,000 people, according to the UN High Commissioner for Refugees. The Houthis have taken the port city of Mokha and are advancing towards the Bab el-Mandeb Strait, forcing residents to flee to government-held areas and camps set up on the outskirts of Aden, where families often arrive with nothing. Nearly 3,000 people have crossed the Gulf of Aden to Djibouti aboard overcrowded boats, and the Djiboutian authorities are preparing to receive up to 10,000 refugees. Arrivals by the hundreds are also being reported in Somaliland and Puntland.
🇮🇱 Israel - 🇵🇸 Palestine • In Masafer Yatta, in the south of the occupied West Bank, Palestinian families whose homes have been demolished by the Israeli army are resettling in converted caves, fitted with solar panels and concrete floors. Israel justifies the demolitions on the grounds of a lack of planning permission, which the residents say they are systematically denied. Some 1,100 Palestinians live in this area under Israeli control.
🇵🇸 Palestine - 🇺🇸 United States • The State Department has extended measures denying visas to Palestinian Authority officials, including President Mahmoud Abbas, ahead of the United Nations General Assembly. Washington accuses them of seeking to internationalise the conflict before international courts and of seeking unilateral recognition of the Palestinian state.
Asia-Pacific
🇰🇵 North Korea - 🇰🇷 South Korea - 🇺🇸 United States • South Korean President Lee Jae-myung suggested that a meeting between Donald Trump and Kim Jong-un could take place in the coming months, whilst stressing that nothing is certain. According to him, the US President is keen to see dialogue between the two Koreas and is continuing his efforts to facilitate such talks.
🇯🇵 Japan • Sanae Takaichi retained her key ministers in a reshuffle aimed at consolidating her coalition. The Finance, Foreign Affairs and Defence portfolios remain in the hands of Satsuki Katayama, Toshimitsu Motegi and Shinjiro Koizumi. The Prime Minister is preparing a controversial cut in the tax on food consumption, estimated to cost 28 billion euros, which is causing concern amongst economists and the markets, with the benchmark bond yield reaching 3 per cent.
🇫🇯 Fiji • The archipelago now regards HIV as a national crisis, following a 27 per cent rise in new cases in 2025 and 2,016 diagnoses. One in 60 adults is believed to be living with the virus, and only 39 per cent of those affected know their HIV status. Fifty-nine babies were born HIV-positive last year, 18 of whom died before their first birthday.
Americas
🇧🇷 Brazil – 🇺🇸 United States • Lula has announced that he will tell Donald Trump, speaking at the United Nations on Tuesday, to “mind his own business” regarding the Brazilian elections. The left-wing president is seeking a new term in October against right-wing candidate Flavio Bolsonaro, an ally of the Republican, in a run-off that is expected to be close. No bilateral meeting is scheduled, but the two men are due to speak one after the other.
🇻🇪 Venezuela • The authorities yesterday unblocked several news websites that had been censored for years, just as the government and the opposition were beginning a second round of negotiations. The NGO VE Sin Filtro still lists at least 188 blocked websites, including 79 media outlets. The day was also marked by the arrest, followed by his release in the evening, of the former opposition mayor Javier Oropeza.
