By Leigh Thomas
PARIS, May 20 (Reuters) – Emmanuel Moulin, President Emmanuel Macron’s pick to head the Bank of France and his former chief of staff, told lawmakers on Wednesday ahead of a knife-edge confirmation vote that he would run the central bank as someone independent and free of outside influence.
Opposition parties have accused Macron of seeking to appoint allies who can wield influence well after he stands down following a presidential election next April that the far right has a chance of winning.
A former banker and senior finance ministry official, Moulin has solid credentials as an experienced policymaker, but he faces a tight confirmation vote due to his links to Macron.
Opponents on the finance committees of both houses could block his appointment if three-fifths of them vote against him. The votes in both houses will be added up and Moulin will be approved if the nays do not surpass 60% of the combined total.
“I stand before you as a free man, a public servant who has served the state for 30 years and who is committed to carrying out his duties with complete independence and impartiality, both in relation to the executive branch and to private interests,” Moulin told lawmakers on the lower house’s finance committee.
As governor of the 226-year-old Bank of France, Moulin would sit on the European Central Bank’s rate-setting governing council and be responsible for regulating French banks.
JUNE ECB MEETING
Moulin said that he could not currently say what his position would be at the ECB’s next rate-setting meeting in June as it depended on the economic data that would come in by then during a particularly turbulent period marked by energy market volatility.
He added that any signs of inflation expectations becoming unanchored would be key and that policymakers would need to be particularly vigilant about underlying inflation, which strips out volatile prices like energy and food.
Wage trends would be the third critical trend to monitor ahead of the June meeting to see if the current shock from the Middle East conflict was having a lasting effect on inflation, he said.
“If the shock is persistent and large-scale, we will clearly need to react,” Moulin told senators. “If it is large-scale but not persistent, perhaps moderate action will be necessary if the shock is merely transitory.”
Moulin said that he saw no need to change the ECB’s mandate to maintain price stability in euro zone countries, which he described as already sufficiently flexible.
The head of the far right Rassemblement National, Jordan Bardella, has previously suggested that there needs to be discussion at the ECB about buying up French debt, a move that could test the limits of its mandate if it were not tied specifically to keeping inflation in check.
With France’s national debt nearing 115% of economic output, Moulin said the situation was “not catastrophic, but it is serious and needs to be taken seriously”.
(Reporting by Leigh Thomas, Dominique Vidalon, Sudip Kar-Gupta and Ingrid Melander; Editing by Makini Brice and Hugh Lawson)
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