Mélenchon's Debt Plan Sparks EU Fears Over Hyperinflation

French presidential candidate Jean-Luc Mélenchon has brought attention to France's public debt issue, proposing to cancel part of it. However, Le Monde columnist Stéphane Lauer argues that this proposal is legally fragile and doesn't address the country's persistent budget deficit.

The proposal involves writing off the share of French debt held by the European Central Bank (ECB), which Mélenchon views as 'one we owe to ourselves.' However, Joachim Nagel, president of the Bundesbank, warns that this would amount to monetary financing of governments and risk opening up 'a Pandora's box' leading to hyperinflation.

According to Lauer, France borrows from investors, with 18% of its total debt held by the ECB as part of its monetary policy. Mélenchon suggests erasing this debt as part of a European agreement, but experts argue that it would be a complex transaction requiring joint decisions with other eurozone central banks.

Lauer emphasizes that simply canceling this debt would not address France's persistent budget deficit and that Mélenchon's proposal is more of a 'strikingly simple promise' than a viable solution.