Jean-Luc Mélenchon proposes canceling public debt held by the ECB

French politician Jean-Luc Mélenchon has sparked debate by proposing the cancellation or freezing of public debt held by the European Central Bank (ECB) within the Eurosystem. This proposal comes as France's debt reached 3,536.1 billion euros, or 117.5% of its GDP, as of late March 2026.

Economists note that such a move cannot be decided by France alone; it would require action at the Eurosystem level, involving the ECB and national central banks. Proponents suggest that erasing debt held by central banks could free up approximately 3,000 billion euros in investment capacity across Europe for goals like ecological transition. However, critics argue the benefits might be illusory, as the state might lose what it gains through the loss of central bank dividends or the need for recapitalization.

Joachim Nagel, president of the Bundesbank, has opposed the proposal, stating it would contravene European treaties. While the legality of debt cancellation remains complex, the debate highlights growing concerns over rising interest rates and the cycle of borrowing to refinance existing debt.