Debt cancellation is “unthinkable” for Christine Lagarde

Posted on Feb 7, 2019 2021 at 14:22Updated Feb 7, 2019 2021 at 14:43

The answer is unequivocal. “ The cancellation of the state debt held by the European Central Bank is unthinkable. It would be a violation of the European treaty which strictly prohibits the monetary financing of States. This rule is one of the fundamental pillars of the euro. “Asked by the“ Journal du dimanche ”, Christine Lagarde wanted to end a debate which has gained momentum in recent days. That of a possible cancellation by the central bank of part of the debt of the States which exploded in the face of the Covid-19 crisis. That is nearly 3,000 billion euros of sovereign bonds that it has in its portfolio.

Friday, a hundred economists and European personalities, including Thomas Piketty or the former Belgian socialist minister Paul Magnette, had launched an appeal to erase the debt. “ Citizens are discovering, some with dismay, that nearly 25% of European public debt is now held by their central bank. […] The ECB could today offer European states the means for their ecological reconstruction, but also to repair the social, economic and cultural damage, after the terrible health crisis we are going through. », Write the authors, mainly French and Italian.

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