France can't count on ECB to fix debt woes, central bank chief says
TLT•Bank of France Governor Emmanuel Moulin said France must avoid a sovereign debt crisis and should not expect the European Central Bank to rescue it. French 10-year borrowing costs reached 4.7%, their highest level since 2008.
1. Debt and borrowing costs
Moulin said France must do everything possible to avoid a sovereign debt crisis ahead of next year's presidential election. French 10-year borrowing costs have reached 4.7%, the highest level since 2008, as investors demand a higher premium over fiscal and political uncertainty.
2. Budget and ECB role
Moulin called for a budget with savings to put the deficit on a downward path, warning that rising debt-servicing costs could put a “gradual stranglehold” on public finances. He described expectations of an ECB rescue as “flawed reasoning,” saying deficit-fixing tools rest with national governments and parliament; ECB crisis mechanisms are activated only after a country takes action of its own.
