FRANCE’S central bank governor ruled out intervention by the European Central Bank (ECB) late on Wednesday, as borrowing costs soared on a mounting debt crisis and hundreds of thousands of school students kept up a revolt against cuts to their schools.
Emmanuel Moulin said the ECB ‘is not here to deal with countries’ budget problems, it is here to fight against inflation’.
The same day, International Monetary Fund chief Kristalina Georgieva warned eurozone governments of ‘very tough political choices’ ahead.
France’s debt reached a record 119 per cent of GDP in the second quarter.
The yield on ten-year bonds has climbed to almost 5 per cent, the highest since 2002, and the gap with German borrowing is the widest since the eurozone crisis of 2012.
The Treasury will issue a record 340bn euros of debt next year, and interest payments will jump 16 per cent to almost 73bn euros, eating a quarter of Prime Minister Sébastien Lecornu’s planned 43bn euros in cuts and tax rises.
Analysts warn that a French crisis could spread to Italy and Belgium and drag in the whole bloc.
The burden of that squeeze has been laid by the French government on the young.
The 2027 budget abolishes 1,588 permanent teaching posts and nearly halves recruitment.
Some 20 million class hours went untaught last year.
On Tuesday, over 500,000 students and workers marched throughout France.
The students are protesting against overcrowded classes, unreplaced teachers, unheated and crumbling buildings and the Parcoursup university admissions algorithm.
‘The army budget grows year after year, but for education we’re trapped in stagnation,’ said Louis, a final-year pupil.
Police have met the movement with tear gas, baton charges and nearly 2,000 arrests in a single day.
A 16-year-old in Tours lost an eye, and a 15-year-old in Lens lost a hand to a grenade.
The student organisations have rejected the government’s offer of an online complaints platform and called for the blockades to continue.
Jean-Luc Mélenchon, who has proposed cancelling the 18 per cent of the debt held by the Bank of France, accused Moulin of meddling in politics as a central banker ‘elected by no one’.
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