The Chief Economist of the European Central Bank said on Monday that the recent market turmoil triggered by political uncertainty was not "disorderly," and there was no need for the ECB to rescue France by purchasing bonds.
Late last week, France's financial markets experienced a significant sell-off as investors adjusted their positions ahead of early elections, potentially allowing the far-right to gain a majority. This led some analysts to speculate about possible ECB intervention.
However, Philip Lane stated that the latest market movements did not meet a key condition for ECB intervention, which is that the increase in risk premiums should be disorderly and unreasonable.
"What we are seeing in the market is repricing, but it does not currently fall into the category of disorderly market," Lane told Reuters NEXT in an interview at the London Stock Exchange.
Lane did not address the situation in France directly but said that all eurozone governments need to adhere to the EU's fiscal framework and engage in dialogue with the European Commission.
Marine Le Pen's Eurosceptic National Rally (RN), which is leading in the polls, has called for lowering the statutory retirement age, reducing energy prices, increasing public spending, and implementing protectionist "France first" economic policies.
French Finance Minister Bruno Le Maire has warned that if the far-right wins the elections on June 30 and July 7, the eurozone's second-largest economy would face the risk of a financial crisis.
