'Economics for Dummies': Pigasse and Bardella clash over debt cancellation proposal

A debate has erupted over the potential cancellation of French debt held by the European Central Bank, pitting financier Matthieu Pigasse against National Rally leader Jordan Bardella. Pigasse, a prominent banker and media owner, echoed proposals from far-left presidential candidate Jean-Luc Mélenchon, asserting that approximately 20% of French debt held by the ECB could be annulled without significant economic or financial impact.

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what you say at LFI is possible, economically.

Pigasse argued that such a move would reveal substantial room for maneuver in public finances. He stated, "We have very important margins of maneuver" in budget planning. This perspective, however, is far from a consensus among economists.

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There is about 20% of French debt held by the ECB. This debt can be canceled.

Bardella sharply disagreed, dismissing Pigasse's claims on social media platform X as "nonsense." He contended that canceling debt held by the Bank of France, which is state-owned, would not increase public finances. Bardella explained that interest paid by the state to the Bank of France is returned as dividends, rendering the cancellation financially ineffective. He also warned that such a move could alarm private investors, who might fear similar actions against them, adding that "there is no magic money."

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without any economic impact and without any financial impact.

The exchange escalated with Pigasse retorting, "Jordan Bardella discovers the Bank of France. But not yet its balance sheet. Economics for dummies..." He reiterated that the Eurosystem holds nearly 700 billion euros of French public debt, questioning the notion of "magic money" and asserting that "Who decides what we do with our money? We do."

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I draw the conclusion that we have very important margins of maneuver.