Moulin Warns ECB Cannot Guarantee France’s Sovereign Debt Stability

Emmanuel Moulin, governor of the Bank of France, emphasized that France cannot depend on the European Central Bank (ECB) to mitigate its sovereign debt challenges, arguing that tools to manage the deficit lie with national policymakers and parliament. Speaking on September 25, 2026, Moulin highlighted that France’s 10-year borrowing costs had surged to 4.7%, a level not seen since the 2008 financial crisis, though he noted the financial sector remains robust and well-capitalized compared to that period. Investors are now demanding higher premiums for French debt amid concerns over fiscal and political uncertainty ahead of the April–May 2027 presidential election and the upcoming budget bill due next Thursday. While France is currently able to access bond markets, rising debt-servicing costs risk tightening public finances gradually. Moulin stressed that while the ECB has crisis mechanisms for severe market stress, these are only activated after a country has already taken corrective action of its own. He urged France to prioritize a budget with measurable savings to reduce the deficit, arguing that fiscal discipline must be ensured to prevent a sovereign debt crisis. ‘Everything must be done to ensure this scenario does not happen,’ he said, underscoring that the ECB’s role is not to replace national fiscal responsibility but to respond to market pressures once they materialize.