France would default on its sovereign debt if it unilaterally converted its euro-denominated obligations into new francs following a National Front election victory, a senior executive at ratings agency Standard & Poor's told The Economist, reports Reuters.
"There is no ambiguity here," Moritz Kraemer, S&P's head of sovereign ratings, said in a letter published in the weekly magazine's latest edition.
"If an issuer does not adhere to the contractual obligations to its creditors, including payment in the currency stipulated, (we) would declare a default," Kraemer wrote.
FN leader Marine Le Pen has pledged to take France out of the euro and convert its debt into a new currency.
This sounds close to an Ellen Brown money printing scheme.
Le Pen should just default on the debt and that would be the end of it but she wants a new currency to support her many interventionist schemes. She is not close to advocating the type of hard money currency that the French economist Jacques Rueff would have.
The problem with the populist revolts occurring around the globe today is that the masses are economically ignorant when it comes to fundamental economics and they have no clue as to what is in their best interest. Thus, one central planning group ends up being replaced by a different central planning group. The idea of free markets and liberty do not register as an option.