The Governor of the Bank of France, Emmanuel Moulin, strongly rejected Jean-Luc Mélenchon 's proposal on Friday to cancel part of France's public debt. Speaking on RTL radio, he described the option as "illegal, dangerous, and pointless." According to him, such a decision would violate European treaties, risk fueling inflation, and would not resolve the budget deficit, which would continue to generate new financing needs.
Emmanuel Moulin, however, does not believe that France is heading towards a crisis comparable to that experienced by Greece. He emphasizes the size and diversification of the French economy, while deeming the current situation "worrying." The governor notably points to a unique trajectory compared to other members of the eurozone: France is currently experiencing both low growth and low inflation, while several of its European partners are experiencing a different dynamic.
The aeronautics industry and the heatwave weighed on activity
Beyond public finances, the Governor of the Bank of France attributes part of the economic slowdown to the various shocks experienced in recent months. In addition to the consequences of the war in the Middle East, the aerospace industry has faced difficulties. Airbus's engine supply problems, in particular, have hampered production and led to a decrease in French exports.
Emmanuel Moulin also warned of the increasingly visible economic consequences of climate change. According to his estimate, the summer heatwave cost the French economy at least 0,1 percentage point of growth, particularly affecting agriculture and the construction and public works sector. For the Governor of the Bank of France, these difficulties reinforce the need to monitor public finances without resorting to debt cancellation, which he considers incapable of resolving the country's budgetary imbalances.
