French Central Bank Chief Urges Against Widening Budget Gaps

(Bloomberg) -- Bank of France Governor Francois Villeroy de Galhau repeated his call to avoid deepening budget deficits after a sell off of French assets as investors fret over the fiscal outlook for France after snap elections.

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Speaking on the eve of an expected European Commission move to put France on the list of countries that face infringement procedures for excessive deficits, Villeroy told a conference of economists at his institution that “we owe our fellow citizens all the respect, consideration, and truth that they expect.”

“Respecting them means first of all knowing how to formulate our expertise in accessible terms, listening with humility to their questions, their expectations, their criticisms,” he said. “Respecting them also means recognizing the demands of reality, and not increasing even further heavy deficits that we cannot finance well. Respecting them is, as I hoped a few days ago, quickly clarifying the economic strategy and in particular the budgetary strategy proposed for our country.”

Villeroy has previously already highlighted that France’s next government must rapidly lay out its fiscal plans. President Emmanuel Macron’s decision to call snap parliamentary elections later this month has spooked markets as it opens the door to a far-right government, or at least a fractious parliament that could struggle to pass economic and fiscal legislation. The current administration already slipped from its plans to cut the budget deficit earlier this year.

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