Germany's governing coalition is considering whether to nominate Bundesbank President Joachim Nagel as a candidate to succeed European Central Bank President Christine Lagarde, according to people familiar with the matter.

Discussions over Nagel's candidacy have gained momentum within the Berlin coalition amid growing speculation that Lagarde might step down before her term ends. The people said German Finance Minister Lars Klingbeil, who is also from the Social Democratic Party, supports Nagel, while Chancellor Friedrich Merz from the conservative camp has not yet taken a position.

Given that the Bundesbank president is traditionally seen as Germany's strongest contender for the ECB presidency, Berlin's refusal to back Nagel could effectively signal an abandonment of the race. However, insiders noted that while the government broadly views Nagel's eventual nomination as unlikely, pushing for his candidacy still carries strategic value. Even if he loses, the move could help Germany secure other key ECB positions, such as chief economist.

If Germany decides to pursue replacing Lagarde, who oversees monetary policy for the eurozone's 360 million people, it could complicate what was previously seen as a two-horse race between Spanish and Dutch candidates. The appointment, expected in the coming months, could become one of the most significant personnel decisions facing European governments.

Although Lagarde recently reiterated that she intends to stay in office until the end of the year, her statement also left the door open for an early departure before her term expires in late 2027. Before Lagarde's latest remarks, Merz had stated that he saw "no need" to rush the succession process, adding, "When the time comes to find a successor, we will carefully consider and decide."

Despite Merz's recent focus on government restructuring, the timeline for addressing the ECB leadership is approaching rapidly. Spokespeople for the German Chancellery, the Finance Ministry, and the Bundesbank all declined to comment on whether Germany would nominate Nagel.