Balancing Defence and Debt: A Delicate Equation for France

Francois Villeroy de Galhau, ECB member and head of the Bank of France, highlighted the need for increased defence spending in France, but cautioned against an unlimited approach due to the country's high public deficit and debt. He referenced previous policies during the COVID-19 pandemic as a comparison.

Francois Villeroy de Galhau, a member of the European Central Bank and head of the Bank of France, emphasized the necessity of expanding defence spending in France. However, he warned about the financial risks of pursuing limitless expenditure given the nation's significant public deficit and debt levels.

Speaking to BFM TV, Villeroy drew parallels with France's approach to public spending during the COVID-19 pandemic, when measures were taken to prevent the economic downfall and protect companies.

Villeroy's remarks underscore the delicate balance required to address national security concerns while maintaining fiscal responsibility, a challenge for policymakers navigating high financial obligations.

(With inputs from agencies.)