Mélenchon pushes for erasing ECB-held French debt amid EU legal concerns

During the presidential campaign, Jean-Luc Mélenchon highlighted a proposal from La France Insoumise to eliminate the share of French sovereign debt held by the European Central Bank, framing it as a debt the nation owes to itself. The plan builds on earlier LFI policy that would convert those bonds into perpetual, zero-interest instruments. Mélenchon argues the cancellation could be achieved via a multilateral European pact, citing a recent debate with the MEDEF employers’ federation.

However, the Banque de France operates within the eurozone’s joint monetary framework, meaning any write-off would involve all member central banks. Joachim Nagel, head of Germany’s Bundesbank, warned that the action would constitute prohibited monetary financing under Article 123 of the EU treaties and could open the door to hyperinflation. The proposal thus sparks a debate over fiscal sovereignty versus EU legal constraints.