He contrasted France with the rest of the currency bloc. The euro area is expanding and inflation is still elevated, he said, noting the ECB's job is to act for the whole region, which is sometimes a good fit for France and sometimes not. His remarks followed the ECB's interest rate increase on Thursday - the second since the Iran war began - alongside higher inflation projections and an assessment that the wider European economy is holding up better than expected to the conflict.
France is losing momentum. Insee cut its 2026 growth forecast to 0.4% from 0.7% on Thursday, while the government is banking on 0.5%. Softer consumer demand and weaker investment are part of the story. The slowdown has already hit fiscal planning: Roland Lescure said the plan to cut the 2025 shortfall from 5.1% to 5% of output "is no longer an option." Budget talks are also clouded by opposition parties resisting unpopular cuts ahead of presidential elections in the spring.
Markets have noticed. The extra yield investors demand to hold French 10‑year bonds over German equivalents pushed past 90 basis points earlier in the week, the widest since Europe's sovereign debt crisis. Moulin warned borrowing costs are biting, saying "interest rates are rising, the costs of interest is rising, we'll soon be paying 100 billion in 2028 or 2029."
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On the campaign trail, a radical remedy has gained attention: far‑left presidential candidate Jean‑Luc Mélenchon wants to wipe out liabilities on the books of the Bank of France and the ECB. ECB President Christine Lagarde has already called that legally impossible and "financially dangerous." Moulin went further, arguing it would amount to an exit attempt from the euro area. His verdict: "illegal, dangerous and useless." He added that such a move would stoke inflation, push up interest rates, and be a default in all but name, noting France has not defaulted since 1797.
Mélenchon pushed back on X, sharing remarks from far‑left lawmaker Manuel Bompard, who alleged in the interview that the Bank of France chief was not telling the truth. Bompard argued EU treaties do not spell out what the ECB must do with debt it holds and said there is no proof freezing debt would lift rates. Mélenchon wrote, "The French central banker is lying by broadcasting false information," and warned of the "public danger" from those who raised ECB rates and "will kill thousands of businesses in France." The Bank of France did not provide a comment on the posts.
Slower growth, higher rates, and political gridlock are a tough trio. They are already feeding through to French borrowing costs and shaping the path of taxes and spending in the years ahead. Keep an eye on the deficit debate and the France‑Germany yield gap - that is where these big picture pressures hit real‑world portfolios.
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