Chairman of the French Central Bank, François Villeroy de Galhau, warned that the government’s fuel subsidy program would increase public debt to prevent fluctuations in oil markets due to conflicts in the Middle East, stating, “We have no money left.”
“Elchi” reports that in a program he attended on RTL channel, Galhau stated that governments are taking some measures against the fragility created by events in the Middle East in oil markets, and that the French government’s step in this direction and possible fuel support to citizens would negatively affect the country’s economy, which already has a high debt burden.
Stating that the state of public finances does not allow the government to provide new subsidies, Galhau said, “We have no money left.” “If we further increase budget deficits and debts, this will lead to an increase in long-term interest rates, i.e., for 10 years or more, and this will punish the French people.” In his assessment, Galhau emphasized that the strongest response to the energy crisis would not be to provide one-off state aid, but to invest in the energy transition. France, with a public debt-to-GDP ratio of approximately 111.7 percent, is among the countries with the highest debt burden within the European Union (EU), along with Italy.
Furthermore, budget proposals aimed at reducing public debt constitute one of the main disagreements between the government and the opposition.
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