French far-left leader urges burning of $699B in central bank debt, polls second ahead of presidential race

With France's presidential election approaching next April, Jean-Luc Mélenchon, leader of the far-left party La France Insoumise (LFI), has sparked controversy by calling for the cancellation of government bonds held by the country's central bank.

Speaking on the campaign trail Thursday (local time), Mélenchon said "what we need to do is take the 18 percent held by the Banque de France and throw it into the fire," according to Reuters and Euronews. The amount in question is approximately 600 billion euros ($699 billion).

He offered no specific plan for how this would be carried out. The core argument is that eliminating the debt would lower France's public debt-to-GDP ratio — which has exceeded 116 percent — and create room for greater fiscal spending. France's total public debt surpassed 3.5 trillion euros in the first quarter of this year.

Left-leaning investment banker Mathieu Pigasse also appeared at the campaign event, arguing that "public debt can be canceled without economic or financial shock." Pigasse previously advised the Greek government during its debt crisis and more recently helped restructure Venezuela's debt.

Prime Minister Sébastien Lecornu pushed back on the platform X, calling the proposal "pure fraud." He added that France needs to raise 310 billion euros this year and asked, "If you break what you've personally signed, who will lend us money?" — warning that any lender would demand "exorbitant interest rates."

Economy Minister Roland Lescure dismissed the idea on broadcaster BFM as "complete nonsense" and warned it could trigger a financial crisis. "Canceling debt means telling the people you owe money to that you won't pay them back," he said. "Behind the debt are depositors, life insurance holders and banks. If you cancel it, trust collapses."

EU treaties explicitly prohibit member states' central banks from financing their own governments. Former Banque de France Governor François Villeroy de Galhau has previously said that canceling the bonds would require France to abandon the euro.

Mélenchon has polled second in recent surveys, with some analysts suggesting he could advance past centrist candidates to reach a runoff against Marine Le Pen, the National Rally (RN) lawmaker who leads the polls.