Eurozone chief expresses ‘confidence’ in France amid debt woes

Luxembourg: Eurozone finance ministers have expressed confidence in France's ability to honor its public finance commitments, despite the country's mounting debt and budget deficits. Eurogroup chief Kyriakos Pierrakakis told reporters after their meeting in Luxembourg, "We have confidence in France's commitment vis-a-vis sound public finances." He added, "I have a lot of confidence in my good colleague Roland Lescure, referring to France's Finance Minister.

France's high government bond yields have been a cause for concern, reaching levels not seen since the global financial crisis. This has been exacerbated by mounting worries about public spending in the country. Despite these concerns, Pierrakakis stated that the eurozone remains "mindful, attentive, vigilant, but not alarmed." He emphasized that while the eurozone economy is facing pressure from the energy shock caused by the war in the Middle East, which has pushed inflation to levels not seen since 2023, the eurozone economy is not in danger of collapsing.

Greece and Italy, facing their own fiscal pressures, have demanded more flexibility under the EU's fiscal rules. However, EU economy chief Valdis Dombrovskis rejected their appeals, stating that the EU had already provided enough flexibility. Dombrovskis warned against providing new fiscal flexibilities, as it could cast doubt on the collective resolve to uphold the rules-based fiscal framework. He added, "We cannot come with new fiscal flexibilities all the time."