Bank of France Governor Emmanuel Moulin said France must act to avert a sovereign debt crisis ahead of next year's presidential election and should not expect the ECB to rescue it. He called for budget savings to put the deficit on a downward path.
France's 10-year borrowing costs have reached 4.7%, their highest level since 2008, as investors demand a larger premium amid fiscal and political uncertainty. Moulin said the state can still tap bond markets, but warned rising debt-service costs could gradually squeeze public finances. He said the situation was not comparable with 2008, describing the financial sector as solid and well-capitalised.
The minority government is due to send its 2027 budget bill to lawmakers next Thursday, beginning weeks of debate over spending cuts in a divided parliament. Moulin said the ECB has crisis mechanisms for periods of severe market stress, but they are activated only after a country has taken action of its own. He said responsibility for fixing the deficit rests with national governments and parliament.
