PARIS (Agefi-Dow Jones)–Banque de la France Governor Francois Villeroy de Galhau said Thursday that it was “vital” for economic policymakers in the euro zone “not to add uncertainty to the uncertainty” in the current context of “high” market volatility.
“There has been greater volatility in the markets for the past few days: in particular foreign exchange – with the appreciation of the dollar as a safe haven – and interest rates – with the very sharp rise in British rates after the announcement on Friday massive budget deficits”, remarked François Villeroy de Galhau before the Finance Committee of the National Assembly.
“It is vital not to add uncertainty to uncertainty, and to stay on our course: the course of a European monetary policy of price stability; the course of a French budgetary policy anchored on a standard of expenditure that is really held, and allowing long-term deleveraging,” said the official, who is a member of the board of governors of the European Central Bank (ECB).
In this turbulent context, it is necessary “to act in strong European and international coordination: going it alone is counterproductive”, added the Governor of the Banque de la France.
“Despite the successive emergencies, it remains essential to project ourselves on a longer horizon and to orient our economic policy responses in a coherent way”, estimated François Villeroy de Galhau. “It can’t be a new ‘whatever it takes’,” he said.
“Demand support policies, largely justified in the context of the Covid shock, are both less available and less adapted to the current crisis: this is essentially reflected in supply problems,” explained the official. .
François Villeroy de Galhau has urged the French executive to “strengthen” the country’s “productive capacity”. “This would both reduce inflation and increase our growth potential,” he said. “We could then finally aim to reconcile full employment in 5 or 10 years, a sustainable increase in purchasing power, while reducing our public debt over time,” said the Governor of the Banque de la France.
-Eric Chalmet, Agefi-Dow Jones; +33 (0)1 41 27 47 95; [email protected] ed: LBO
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September 27, 2022 12:28 ET (16:28 GMT)