For the governor of the Bank of France, two criteria must be met to be in a war economy: the “shift of the production apparatus towards armament industries” and “the unorthodox financing of these military expenses.” The governor of the Bank of France, François Villeroy de Galhau, stated on Wednesday that France was not in a war economy, even though he praised the European Central Bank for being more attentive to geostrategic factors.
“I believe that we are not in a war economy. We are facing an increase in defense spending, which is very different,” said François Villeroy de Galhau at the Paris Forum for Defense and Strategy.
“I will venture to give a definition,” he said, with “two criteria” for a war economy, according to him: the first is “a shift of the production apparatus towards armament industries,” and the second is “the unorthodox financing of these military expenses – and, let’s be clear, we are printing money,” the governor clarified.
“When we look at Russia and Ukraine, they currently meet one of the two criteria, not necessarily the second,” said the head of the French central bank.
He noted that the European Central Bank is surrounding itself with more experts in geopolitics. “We are even more attentive. And you will be interested to know that in the past six months, we have already had two seminars with specialists in geopolitics and defense, with whom we have discussed within the council of governors,” he detailed.
“It has been 11 years since I have been in this profession. In the first 10 years, we did not do this. But I believe this clearly shows the importance for us to analyze, in as open and competent a manner as possible, with the help of experts, our environment,” highlighted François Villeroy de Galhau. A “ministerial meeting on the war economy” is scheduled for Thursday afternoon, according to a statement from the Prime Minister’s office on Wednesday.
It was supposed to take place on March 16 and had been postponed. The Prime Minister intends to “provide a clear assessment of the three years of war economy initiated by France,” highlighting “progress” but stating that “this effort still needs to be intensified” in the face of “the rapid evolution of the international situation,” Matignon explained when announcing the meeting.
This meeting will also allow for the “precise assessment of the capacity of industrialists to respond to the additional orders envisaged in the framework of the update of the military programming law” planned for spring, Matignon also explained.
