Lagarde Slams Mélenchon's Debt Cancellation Plan as 'Illegally Unsound'

European Central Bank President Christine Lagarde has rejected French presidential candidate Jean-Luc Mélenchon's proposal to cancel part of France's public debt. The plan, which would involve negotiating with the Banque de France through the ECB's bond-purchasing programs, is deemed illegal and financially dangerous by Lagarde.

Mélenchon wants to cancel approximately 18% of French public debt, amounting to around $220 billion, as a way to release money for social spending. However, Lagarde argues that this would breach Article 123 of the EU treaty, which prohibits the ECB and national central banks from directly financing governments.

Lagarde also warns that cancelling debt would damage France's credibility with investors, making future borrowing more expensive. She describes the proposal as 'a waste of time' and emphasizes its potential harm to financial stability in the eurozone.