Lagarde puts France’s debt fix on Paris, not the ECB
The ECB president said domestic budget consolidation is France’s first response as investors question the country’s deficit plans.
Key takeaways
- Lagarde said France should address its debt and deficit through domestic fiscal consolidation.
- Investors fear political maneuvering could hinder France’s deficit-reduction efforts.
European Central Bank President Christine Lagarde said France should tackle its debt and deficit through domestic fiscal consolidation, rather than rely on central-bank bond intervention. She told CNN in Bangkok that the first and main solution lay in France itself, Reuters reported.
French government bonds have been among the hardest hit in a global selloff. Investors fear political maneuvering ahead of next year’s presidential election could hinder efforts to cut the budget deficit.
Investors have speculated about the ECB’s Transmission Protection Instrument, which can be used to buy government bonds when market pressures are judged unwarranted and disorderly. Lagarde’s remarks put the focus on France reassuring investors through fiscal measures.
This article was produced with the help of AI technology. Based on reporting by the outlets listed above.
