ECB Chief Lagarde Rejects Mélenchon's Debt Cancellation Proposal
Lagarde said canceling the debt would violate European Union treaty rules and could raise borrowing costs, as France’s debt tops 116% of output.
- European Central Bank President Christine Lagarde rejected Jean-Luc Mélenchon's proposal to cancel 18% of France's national debt on Thursday, calling the plan "financially dangerous" and legally impossible under European Union law.
- Seeking to increase social spending, France Insoumise leader Jean-Luc proposes cancelling debt held by the Bank of France, arguing it would provide fiscal space as France's debt burden exceeds 116% of economic output.
- Lagarde cited Article 123 of the Treaty on the Functioning of the European Union, which bars debt cancellation, calling the treaty "a pillar of stability" and warning circumventing these rules would be a "clear violation."
- French Prime Minister Sébastien Lecornu warned the plan would "destroy France's most important asset, namely trust," while 2025 Nobel Prize winner Philippe Aghion described it as "catastrophic."
- With France's presidential election scheduled for next year, recent polling indicates Mélenchon's support has reached around 16%; Lagarde warned she would "significantly increase the interest rate" if a borrower refused to repay.
12 Articles
12 Articles
While France, in particular, is calling for the cancellation of the ECB's debt, there have been many voices against it. The President of the European Central Bank believes that this is impossible, "legally, technically and financially".
The President of the European Central Bank, Christine Lagarde, rejected on Thursday the plan of the leader of the French Party, Jean-Luc Melenchon, to cancel part of the country's public debt, calling the idea "financially dangerous and legally impossible under EU law", reports Reuters, quoted by Agerpres.
Lagarde Says French Far-Left Debt Plan ‘Financially Dangerous’
A far-left proposal to reduce France’s mountain of borrowing by canceling debt held by central banks doesn’t make sense and would be financially dangerous, according to European Central Bank President Christine Lagarde.
ECB's Lagarde rejects French far-left leader's debt-cancellation plan as 'financially dangerous'
BERLIN, Sept 10 - European Central Bank President Christine Lagarde on Thursday rejected French far-left leader Jean-Luc Mélenchon's plan to cancel a portion of France's national debt, calling it \"financially dangerous\" and legally impossible under EU law. Read more at straitstimes.com.
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