Pigasse Backs Mélenchon Call to Cancel ECB-Held Debt

Overview

• The debate escalated after Matthieu Pigasse publicly endorsed Jean‑Luc Mélenchon’s proposal to cancel or “freeze” parts of state debt held by the Eurosystem, saying that roughly €700 billion of French debt sits on central‑bank balance sheets.
• Rassemblement National leader Jordan Bardella publicly rejected Pigasse’s claim, arguing that debt held by the Banque de France already cycles interest back to the state and so cancellation would not ease public finances.
• Mélenchon reiterated the demand at LFI’s summer event and framed the move as creating fiscal space, while senior government figures including Economy Minister Roland Lescure warned the idea would be illegal under EU treaties and could trigger a financial crisis.
• Analysts and commentators say cancelling central‑bank holdings faces steep legal and institutional barriers and could change investor expectations, which risks higher borrowing costs, inflationary pressure, and harm to France’s ability to fund public services.
• No policy action has been taken and markets have not yet seen a formal proposal; coverage so far centers on the political clash, the technical question of Eurosystem holdings, and France’s fiscal context with €3.46 trillion of public debt and debt yields near multi‑year highs.