ECB’s Villeroy: Pandemic debt cancelation would be dangerous path
|Writing off the public debt the European Central Bank (ECB) bought during the coronavirus pandemic could be very dangerous, the Governing Council member and Bank of France Governor warned in an interview with Ouest France newspaper on Friday.
Key quotes
“To consider debt cancellation would be a very dangerous path.”
“When the euro was introduced, France, like the other states, undertook by Treaty to always reimburse the central bank. It is an absolutely essential pact of confidence.”
His comments come in response to the Italian Cabinet Undersecretary Riccardo Fraccaro’s, Prime Minister Giuseppe Conte’s closest aide, suggestions that the ECB should consider canceling the government debt it buys during the coronavirus crisis to help nations recover from the economic blow.
Market reaction
EUR/USD is off the highs but trades well bid at 1.1920, as of writing. The spot is higher by 0.08% on the day.
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