The President of the European Central Bank (ECB) Christine Lagarde during a visit to the Pasqal company, specializing in quantum computing, on June 17, 2024 in Massy, near Paris (AFP / Emmanuel Dunand)
“We are attentive to the proper functioning of the financial markets,” said the President of the European Central Bank (ECB) Christine Lagarde on Monday, when asked about the upheavals caused by the political crisis in France.
“My obsessive objective is to bring inflation back to the medium-term target of 2%. Price stability is of course understood in parallel with financial stability. So we are attentive to the proper functioning of the financial markets” , replied the manager, when asked about the fall in the stock markets at the end of last week.
“We continue to be attentive of course, but it is limited to that,” added Ms. Lagarde, on the sidelines of a visit to the French company Pasqal, specializing in quantum computing, in Massy (Essone).
The Parisian CAC 40 index erased all of its annual gains on Friday after a fall of more than 6% over the week, following the announcement of a dissolution of the National Assembly and the risk of institutional blockages . In its wake, the stock exchanges of Frankfurt, Milan and London also fell.
The dissolution of the National Assembly announced by the French president on June 9 was followed by a week of twists and turns and political confusion in the country, with alliances and the nomination of candidates decided urgently. The two rounds of early legislative elections will be held on June 30 and July 7.
On Monday, European indices were up slightly but were far from compensating for last week’s losses.
The interest rate gap between France and Germany at 10 years, a tool for measuring the confidence placed by investors in a country, crossed 80 basis points at the end of last week, a record since the debt crisis that hit the eurozone more than a decade ago, according to Ipek Ozkardeskaya, analyst at Swissquote Bank.
Furthermore, when asked about her possible political future in France, Christine Lagarde brushed aside the question. “You have to stay in your place and maintain your rank. Today as President of the ECB my imperative objective is to bring inflation down to 2%. This may seem trivial given the political issues, current debates, etc. . But (…) that’s why I was sent,” she said.
