Christine Lagarde, Ursula von der Leyen nominated for top EU posts

European Union leaders agree to nominate France's Christine Lagarde to be the new head of the European Central Bank and seal a deal on filling the other four top jobs in the bloc after tortuous marathon talks exposed their deepening divisions.

Appointments must still be endorsed by European Parliament

France's Christine Lagarde has been nominated as a candidate for the post of European Central Bank president. She has been managing director of the International Monetary Fund for eight years. (Markus Schreiber/Associated Press)

European Union leaders agreed on Tuesday to nominate France's Christine Lagarde to be the new head of the European Central Bank and sealed a deal on filling the other four top jobs in the bloc after tortuous marathon talks in Brussels exposed their deepening divisions.

"The European Council has agreed on the future leadership of the EU institutions," said Donald Tusk, chairman of the EU leaders' talks.

Lagarde is a former French finance minister and has been managing director of the International Monetary Fund since 2011.

German Defence Minister Ursula von der Leyen, an ally of Chancellor Angela Merkel, would become head of the European Commission, the EU executive, under the deal reached in Brussels, which must still be endorsed by the European Parliament.

Von der Leyen would succeed Jean-Claude Juncker in the role if approved by the larger body.

German Defence Minister Ursula von der Leyen was 'enthusiastically' backed by Emmanuel Macron to succeed Jean-Claude Juncker as president of the European Commission. (Fabrizio Bensch/Reuters)

Leaders hope the decision to nominate two women to the top of EU decision-making for the first time sends a positive message and repairs damage wrought by such a fractious summit, diplomats said.

"After all, Europe is a woman," Tusk told reporters, referring to the ancient Greek myth of Europa who gave her name to the continent.

Lagarde, once France's first woman finance minister, is a strong advocate of female empowerment, although she has no direct, active monetary policy experience.

The biggest task for Lagarde, who had previously denied any interest in an EU job, will be to revive the euro zone economy.

"Christine Lagarde will … be a perfect president of the European Central Bank," Tusk said. "I am absolutely sure that she will be a very independent president …."

Von der Leyen, if approved, would run the powerful European Commission, which supervises EU states' budgets, acts as the bloc's competition watchdog and conducts trade negotiations with outside countries. Her presidency would shape policy for the world's biggest trade bloc and its 500 million people.

Franco-German 'fruit'

But it was not all girl power at a torturous summit that had leaders nodding off and their police escorts slumped on chairs as groups of leaders huddled in search of a deal.

With a weakened Merkel facing a rebellion by her centre-right European People's Party (EPP) early on in the summit, efforts to push through a deal pre-agreed with French President Emmanuel Macron met stiff resistance from Italy, Poland and others.

They scuppered a plan to install former Dutch foreign minister Frans Timmermans as commission president.

But Macron put a positive spin on the nomination process at a news conference.

"This accord is the fruit of a deep Franco-German entente," Macron told a news conference.

French President Emmanuel Macron and German Chancellor Angela Merkel, seen last week at the G20 summit in Japan, were involved in hashing out compromises for the various posts. (Franck Robison/EPA-EFE)

Macron defended the decision to appoint the German defence minister to head up the commission.

"Von Der Leyen is a very good candidate and a very good choice to head the European Commission," Macron told journalists.

"I energetically backed her candidature. She was not the initial German choice … but I think she is a very good candidate because she has the experience and required competence."

Macron said the new European team with two women and two men, are personalities who have a strong engagement towards Europe.

"The capacities and competencies of Madame Lagarde totally qualifies her to preside the European Central Bank," he said, adding that her experience at the International Monetary Fund during the financial crisis gives her credibility to face the markets.

Timmermans and Margrethe Vestager, the lead candidate for the liberals in May's parliament election, were put forward as deputies under von der Leyen in the next Commission, which takes office on Nov. 1.

New names 'understand' Brexit: Irish PM

In other decisions on Tuesday, Spain's acting foreign minister, Josep Borrell, a socialist, was nominated as the EU's new top diplomat in Brussels.

Macron and Spanish Prime Minister Pedro Sanchez, who had pushed hard for Timmermans, also secured the election of Charles Michel, to replace Tusk as chair of EU summits. In that role as president of the European Council, the Belgian will be tasked with building compromises between the 28 member states.

Michel has been prime minister of Belgium since 2014 but currently leads the government only on an interim basis until a new coalition is formed.

The fifth prominent EU role up for grabs is the president of the European Parliament. Lawmakers are due to choose that person in Strasbourg on Wednesday.

Possible names include Bulgarian socialist Sergei Stanishev and Manfred Weber, the German EU lawmaker who led the May election campaign for the EPP.

Charles Michel of Belgium has been put forth to succeed Donald Tusk as European Council president. (Olivier Hoslet/EPA-EFE)

"It's still possible, maybe very likely, that the parliament will vote for a president from eastern and central Europe. I hope so," said Tusk, a former Polish prime minister.

The candidates will help lead the EU's policies in the next five years on everything from climate to migration to trade.

In the short term, Brexit looms.

Irish prime minister Leo Varadkar said he was confident von den Leyen would show the same solidarity with Ireland over Brexit as its outgoing president Juncker has.

Varadkar also welcomed the naming of Michel as the next head of the European Council, saying "he understands Brexit."

Britain negotiated for an extension of the deadline for leaving the EU, which

"I hope from my side that we finish before [then]," said Macron. "We shouldn't be scared of the worst-case scenario, which is always a possible option, and at the end of the day will be the responsibility of the British … because at the end of the day until the last second, the British government has the possibility to withdraw Article 50 and decide not to leave."