Marine Le Pen, leader of France’s far-right National Front, has indicated that she hopes to reintroduce a national currency if she is elected president in May. In a recent speech, she suggested that government bonds would be redenominated in francs instead of euros.But, of course, she wants to do it for dastardly reasons. The Economist again:
The proposal was dressed up in technicalities. The franc would be revived as a “parallel” currency for official transactions and used alongside the euro in a version of the systems (the snake and the exchange-rate mechanism) that existed in the 1970s and 1980s. Such schemes tied European currencies together but were subject to regular crises, with France periodically devaluing the franc.
Investors would pretty quickly see through the façade. There is not much point in bringing back a national currency unless you want the right to devalue it. And there is not much point in redenominating government bonds in francs unless you want to pay creditors back less than they expected. (This might technically count as a default, according to Moody’s, a rating agency; it depends on the exact circumstances.)What fun. Screwing the holders of French government debt by paying them with drole d'argent.