{"id":3928,"date":"2026-09-05T20:03:38","date_gmt":"2026-09-05T20:03:38","guid":{"rendered":"https:\/\/www.vaultinsider.top\/?p=3928"},"modified":"2026-09-05T20:03:38","modified_gmt":"2026-09-05T20:03:38","slug":"a-leading-french-presidential-candidate-has-a-simple-solution-to-national-debt-just-cancel-it","status":"publish","type":"post","link":"https:\/\/www.vaultinsider.top\/?p=3928","title":{"rendered":"A leading French presidential candidate has a simple solution to national debt: just cancel it"},"content":{"rendered":"<p><img decoding=\"async\" src=\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2026\/09\/GettyImages-1243090542-e1788630126687.jpg?w=2048\" \/><\/p>\n<p>Unlike in the U.S., candidates in France\u2019s election have actually focused on how to tackle the national debt, as a new president is due to take charge of the eurozone\u2019s second largest economy next year.<\/p>\n<div>\n<p class=\"wp-block-paragraph\">Last month, a French presidential debate was dominated by the country\u2019s rising public\u00a0debt.\u00a0By contrast, midterm election races in the U.S. are about data centers, higher gas prices, and the Iran war, even as America\u2019s own mountain of debt hits $40 trillion.<\/p>\n<p class=\"wp-block-paragraph\">While U.S. lawmakers are largely ignoring the issue, financial markets aren\u2019t. Treasury yields have jumped in recent weeks, along with those of other heavily indebted countries like France.<\/p>\n<p class=\"wp-block-paragraph\">In fact, France\u2019s public debt now tops 116% of \u200bGDP, which is worse than the U.S. ratio of roughly 100% when measured by publicly held debt. Meanwhile, France\u2019s economy has been mired in low economic growth in recent years, while the AI boom is turbocharging America\u2019s GDP.<\/p>\n<p class=\"wp-block-paragraph\">But far-left presidential candidate Jean-Luc Melenchon is campaigning on a plan to have the central bank simply cancel its holdings of French debt.<\/p>\n<p class=\"wp-block-paragraph\">With a lighter debt burden, in his view, the French government could then spend more on social programs. The message is proving to be popular with voters, and polls indicate Melenchon is headed for a runoff with far-right leader Marine \u200bLe Pen in next year\u2019s presidential election.<\/p>\n<p class=\"wp-block-paragraph\">\u201cAll we have to do is take the 18% held by the Bank of France and chuck it in the fire,\u201d\u00a0Melenchon has said.<\/p>\n<p class=\"wp-block-paragraph\">Easy peasy, right?<\/p>\n<p class=\"wp-block-paragraph\">France\u2019s own prime minister has warned that reneging on the national debt would force the country to borrow at exorbitant interest rates, just as the government must turn to the bond market to raise more than $360 billion this year.<\/p>\n<p class=\"wp-block-paragraph\">Melenchon insists his plan is doable as it targets debt held by the central bank, not investors. Still, at a recent campaign event, he hinted debt cancelation may not stop with the Bank of France.<\/p>\n<p class=\"wp-block-paragraph\">\u201cWhy did we make a single currency and an ECB together? We can do it and I bet we\u2019d find allies in Europe,\u201d he said. \u201cThere is a debate \u2014 I\u2019m not going after private creditors, not at this step in any case.\u201d<\/p>\n<p class=\"wp-block-paragraph\">But the head of Germany\u2019s central bank, who is also a member of the European Central Bank Governing Council, said Melenchon\u2019s debt cancelation idea would be forbidden under the currency bloc\u2019s rules and could lead to hyperinflation.<\/p>\n<p class=\"wp-block-paragraph\">\u201cNo central bank in the Eurosystem nor the ECB is allowed to cancel national debt,\u201d Bundesbank chief Joachim Nagel told French newspaper <em>Le Monde<\/em>. \u201cThis would constitute monetary financing of government, which is prohibited under the European treaties.\u201d<\/p>\n<p class=\"wp-block-paragraph\">Although the eurozone\u2019s biggest economy would stand in Melenchon\u2019s way, investors are getting more nervous about French debt. The yield on French 10-year bonds was about 88 basis points above equivalent German yields, nearing the highest spread since Europe\u2019s debt crisis in 2012.<\/p>\n<p class=\"wp-block-paragraph\">Adding to the turmoil is the fact that\u00a0there\u2019s no parliamentary majority that would support budget cuts and trim the deficit, which is near 5% of GDP\u2014well above the European Union\u2019s sub-3% target and a cause of additional bond market angst.<\/p>\n<p class=\"wp-block-paragraph\">Kristian Kerr, head of macro strategy for LPL Financial, pointed to the spread between French and German 10-year yields as a key indicator, with 90 basis points historically serving as a ceiling during times of fiscal stress.<\/p>\n<p class=\"wp-block-paragraph\">In a note on Wednesday, she warned that if the spread were to decisively top 90 basis points, it could mean investors see France\u2019s fiscal challenges as long term rather than just temporary. <\/p>\n<p class=\"wp-block-paragraph\">\u201cThat shift would matter well beyond France,\u201d Kerr added. \u201cEuropean and global sovereign debt markets remain highly interconnected, and a material deterioration in confidence toward French debt could easily spill over into other countries with weaker fiscal profiles.\u201d<\/p>\n<\/div>\n<p>#leading #French #presidential #candidate #simple #solution #national #debt #cancel<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlike in the U.S., candidates&hellip; <\/p>\n","protected":false},"author":1,"featured_media":3929,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[3542,6149,373,1346,4096,3511,658,1034,1654,202,6805],"class_list":["post-3928","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-news","tag-cancel","tag-candidate","tag-debt","tag-france","tag-french","tag-leading","tag-national","tag-national-debt","tag-presidential","tag-simple","tag-solution"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - 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