Legislative: beware of the “too optimistic” use of Banque de France models, warns the governor

Legislative: beware of the “too optimistic” use of Banque de France models, warns the governor

“If France spent too much and had to borrow even more, it would inspire less confidence in its lenders and the cost of its debt could increase rapidly,” insisted François Villeroy de Galhau this morning.

Two days before the first round of the legislative elections, the governor of the Banque de France warned on Friday against using “too optimisticof certain parameters of its economic models, a criticism addressed implicitly to Jean-Luc Mélenchon’s Nupes.

The Banque de France is completely independent and does not have to make political comments“, said François Villeroy de Galhau on BFM Business. “But it is my duty to provide some factual clarification“, he added while Jean-Luc Mélenchon, the leader of the New popular, ecological and social union (Nupes) said to have quantified his program “based on the Banque de France model“. According to the calculations of the leader of rebellious France, the implementation of the Nupes program would thus generate 250 billion euros in additional public expenditure each year, and 267 billion euros in revenue for the State.

“We cannot both want to keep the euro and refuse the rules of the collective European game”

The left alliance also says it is ready “not respecting certain rules» European. “The Banque de France has obviously not quantified, and even less validated, any candidate programin the legislative elections, said François Villeroy de Galhau on Friday. “She warns in particular against the mechanical and overly optimistic use of so-called fiscal multipliers, taken out of any context“, he continued. “If France spent too much and had to borrow even more, it would inspire less confidence in its lenders and the cost of its debt could rise rapidly.“Insisted the governor, citing the example of Italy in 2018, when a eurosceptic coalition came to power.

Contrary to what some are saying, in this case we should not count on the ECB to buy more French public debt“, assured François Villeroy de Galhau. “It could not cancel the French public debt either, because it is contrary to the founding treaty of the euro“, he specified. “We cannot both want to keep the euro and refuse the rules of the European collective game“, estimated the governor, who spoke the day after the announcement by the European Central Bank of the start of normalization of its monetary policy. “You can trust uson economic management, Jean-Luc Mélenchon had on the contrary said on Tuesday during the presentation of his economic program “regulated“. More than 170 economists have also signed Thursday on the site of the Sunday newspaper a forum in support of the economic program of Nupes.

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