DUBROVNIK, CROATIA (Reuters) – Christine Lagarde, president of the European Central Bank (ECB), avoided a question on Friday about the turmoil in French financial markets following the dissolution of the National Assembly, saying only that the institution would achieve its inflation objective.
“I am not going to comment on national political situations,” she said in response to a question about possible recourse to an ECB emergency bond purchase program to help France.
The yield gap between French and German ten-year bonds has increased by almost 30 basis points since last Friday, the largest weekly differential since 2011, a period during which the euro zone was in the grip of a financial crisis. sovereign debt.
This risk premium on ten-year French debt, which on Friday rose to more than 80 basis points compared to the German Bund of the same maturity, a benchmark for the euro zone, is linked to uncertainties in view of the legislative elections in France. , after the rout of Emmanuel Macron’s party in the European elections.
“I will simply say that it is the duty of the European Central Bank to fulfill its mandate and keep inflation under control and bring it back to its target level,” said Christine Lagarde, in response to a question on a possible recourse to the Transmission Protection Instrument (TPI), a tool intended to combat the risk of fragmentation within the euro zone.
(Reporting Francesco Canepa; French version Claude Chendjou, edited by Bertrand Boucey)
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