Lagarde Rejects Mélenchon Debt Cancellation Plan

European Central Bank (ECB) President Christine Lagarde has dismissed Jean-Luc Mélenchon's proposal to cancel France's debt held by the ECB. The plan, put forth by the French presidential candidate and leader of La France Insoumise, would involve erasing approximately 18% of France's total debt.

Mélenchon first floated this idea during the COVID-19 pandemic in 2022, but revived it last month while campaigning for the upcoming April 2025 presidential election. The proposal has already garnered criticism from prominent figures such as French Prime Minister Sébastien Lecornu and Nobel Prize-winning economist Philippe Aghion.

Lagarde deemed the idea 'really not a good idea', citing that it would amount to a clear violation of the European Union's treaty. Mélenchon had suggested that canceling the debt could be as simple as taking the debt securities to the Banque de France and throwing them in the fire.