Mélenchon tosses a debt bomb into France's presidential debate

'The European Central Bank can and must freeze [European] governments' debt, starting with the debt incurred during the Covid-19 pandemic,' he added, doubling down on an idea he first floated earlier this summer with another temperature-themed metaphor, when he promised to 'set fire' to debt held by the Eurosystem — the overwhelming majority of which sits with the Bank of France. The Eurosystem, which comprises the ECB and the currency area's national central banks, owns around one-sixth of French debt, totaling some €600 billion. The leftist leader was addressing a 10,000-strong crowd gathered at a rally meant to set the tone for the months-long marathon of the 2027 election campaign. By contrast, the center-right and the center-left have yet to decide who is best placed to represent them, with a dozen contenders in the running. Still, Mélenchon's rivals all seem to agree on one thing: His proposal would only aggravate France's fiscal woes. 'This is absolutely not the right time, from both a macroeconomic and a political standpoint,' to discuss canceling public debt, said Lalucq, an economist by training, who highlighted the same criticism many of her peers have raised. While she, along with leading economists, advocated for such a measure at the end of the Covid crisis, circumstances have radically changed, she said. Inflation is now a key concern, and such a measure would worsen the problem.