On Monday, September 1, Christine Lagarde—chief of the European Central Bank—expressed concern over the potential collapse of the French government, noting that political instability in any euro zone country affects markets.
Responding to a French radio inquiry, Lagarde commented on the upcoming September 8 confidence vote that could bring down Prime Minister François Bayrou’s minority government.
“All risks of government collapse in any euro zone country are worrying,” Lagarde told Radio Classique:
Political developments, and the emergence of political risks, have an obvious impact on the economy, on how financial markets assess country risk, and are therefore a concern for us.
Bayrou stunned France last week by calling a confidence vote, following months of deadlock over his government’s plans to slash France’s mounting public debt.
