France must avoid debt crisis without ECB help, warns Bank of France Governor

Emmanuel Moulin, Governor of the Bank of France, has warned that France must make every effort to avoid a public debt crisis ahead of next year’s presidential elections. Speaking to Public Senat, Moulin cautioned that it would be a mistake to expect the European Central Bank to rush in with a solution.

Concerns regarding fiscal and political uncertainty in Paris have driven the borrowing cost for French ten-year bonds to 4.7%, the highest level since the 2008 global financial crisis. While Moulin noted that the current financial sector remains robust with a strong capital base, he warned that rising debt service costs risk “gradually strangling” public finances.

To address these issues, Moulin emphasized the need for a budget that forecasts savings and returns the deficit to a downward trajectory. The minority government is scheduled to submit the 2027 budget bill to Parliament next Thursday, which is expected to trigger intense debate over spending cuts within a deeply divided legislature.