PARIS: Marine Le Pen’s pledge to ditch the euro if elected French president would cost the country over 30 billion euros a year in increased borrowing costs, the country’s central bank governor warned Monday.
With less than three months to go before the first round of the election Le Pen is polling strongly on a nationalist platform of heavily curtailing migration, relinquishing the euro and organising a referendum on France’s EU membership.
Banque de France governor Francois Villeroy de Galhau said that pulling out of the single currency would drive up the cost of France’s borrowing.
“If we were alone, we would be helpless faced with financial market speculation... and helpless faced with US pressure on the dollar,” he told France Inter radio.
“Financing France’s public debt would cost over 30 billion euros ($31 billion) a year: that’s the equivalent of France’s annual defence budget,” he said.
Villeroy de Galhau did not give a breakdown of the calculation but said the interest on France’s debt had fallen by 1.5 per cent since it adopted the single currency.
“That is very significant for those with home loans, for business investments and all taxpayers,” he said.
He also credited the euro with keeping inflation down, causing it to fall from nearly five per cent annually before the 1992 Maastricht Treaty that ushered in the euro to under two per cent currently. Le Pen has argued that France needs to take back control over its monetary policy to boost growth — forecast to come in at 1.3 per cent in 2017, below a eurozone average of 1.7 per cent — and rein in unemployment. — AFP
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