The man who used to run Macron's office is about to run France's central bank.
French lawmakers gave Emmanuel Moulin the green light on Wednesday to lead the Bank of France.
Moulin used to run Macron's office. He has spent decades in French public finance.
Still, the vote was tight. 52.7% of finance panel members voted against him.
Blocking the pick needed three-fifths, so he cleared the bar.
Moulin is 57. He took the top job at the French Treasury in 2020.
Before that, he worked as a banker and a senior aide at the finance ministry. He also steered France through the COVID-19 crisis and recent inflation shocks.
The Independence Question
After all those past roles, Moulin's biggest challenge is not the economy. It is convincing markets he can run the bank free from his old boss.
He told lawmakers he stands before them as a free man. He cited 30 years of service to the state.
He promised to be free from both the government and private interests.
That promise matters for one big reason. As Bank of France governor, Moulin sits on the European Central Bank's rate-setting board.
He also oversees French banks.
Why it matters: Both jobs only work if markets believe he is not taking orders from the Elysee Palace. Any sign that he is bending to political pressure can push French bond yields higher.
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France's Debt Problem
Those higher yields would only deepen the issue. France's national debt is closing in on 115% of GDP.
Moulin called the situation serious but not catastrophic.
The French government wants to narrow the deficit. The target this year is 5% of GDP.
That is still well above the EU's 3% limit.
France was below the 3% limit briefly in 2017 to 2019. But it has been above it every year since the pandemic.
One government after the next has promised reform. Each has run into gridlock.
That gridlock is why markets are watching what Moulin does next. He could use his ECB seat to push for relief.
Or he could hold the line on independence.
The far-right National Rally has floated an idea of its own. They want the ECB to buy French debt.
That move would stretch the bank's mandate. The ECB is set up to focus on price stability.
Its job is not to bail out one country.
What To Watch
With that mandate in mind, the ECB's next rate call lands in June. Moulin said he can not commit yet.
He wants to see how price forecasts, core inflation, and wages move first.
A few things to track:
- French bond yields. A rising gap over German bonds signals stress.
- ECB tone. Any sign of softening on French debt would move markets.
- Moulin's first speech. His tone will set the table for the next few years.
The June ECB meeting will be the first real test.
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