Macron ally cleared to run French central bank
Emmanuel Moulin Approved as Bank of France Governor
By Leigh Thomas and Elizabeth Pineau
Background and Appointment
PARIS, May 20 (Reuters) - Emmanuel Moulin, President Emmanuel Macron's former chief of staff, on Wednesday won lawmakers' approval to head the Bank of France after promising he would run the central bank free of outside influence.
Opposition parties say Macron's nomination of Moulin is the latest example of his efforts 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.
Moulin's Credentials and Independence
A former banker and senior finance ministry official, Moulin has solid credentials as one of France's most experienced policymakers, but he faced questions from lawmakers about his independence in view of his links to Macron.
"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 during the confirmation hearing.
Role and Responsibilities
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.
Opponents on the finance committees of both houses could have blocked his appointment if three-fifths of them had voted against him. In the end Moulin was cleared with 52.7% voting against him.
Moulin's Experience and Crisis Management
The 57-year-old has a reputation as a veteran crisis manager after advising former president Nicolas Sarkozy during Europe's debt crisis as well as Christine Lagarde, now ECB chief, when she was finance minister.
Appointed head of the Treasury in 2020 after heading finance minister Bruno Le Maire's office, he also helped steer France through the COVID‑19 crisis, inflation shocks and EU budget negotiations.
Upcoming Challenges and Policy Stance
June ECB Meeting
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.
Inflation and Economic Outlook
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."
ECB Mandate and French Debt
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 National Rally, 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)
