Lagarde Rejects Mélenchon's Debt Cancellation Proposal

European Central Bank President Christine Lagarde has dismissed French far-left leader Jean-Luc Mélenchon's proposal to cancel part of France's national debt. Mélenchon suggested eliminating 18% of the country's debt, which exceeds 116% of its economic output, to provide leeway for increased social spending.

Lagarde labelled the idea 'financially dangerous' and 'legally unfeasible', questioning its viability under existing EU law. She equated it to a personal borrower refusing to repay loans and then seeking new financing.

Lagarde underscored that debt cancellation is expressly barred under Article 123 of the Treaty on the Functioning of the European Union, which she described as a key component of economic stability.