Paris, France – The French central bank has confirmed that the country is not currently experiencing a “war economy,” despite a significant increase in defense spending.
Furthermore, it also stressed the need to monitor geopolitical developments and their impact on the economy and monetary policy.
Definition and standards of war economy
François Villeroy de Galhau, The French central bank , explained that a war economy is measured by two main criteria.
The first is the extensive diversion of national production towards military industries.
The second is the financing of these expenditures through unconventional means such as printing money.
In addition, he added that some countries may meet one criterion without meeting the other.
However, this is not the case for France. France is simply increasing its defense spending without resorting to exceptional financing methods.
Strengthening geopolitical analysis in Europe
He noted that the European Central Bank is paying increasing attention to geopolitical developments.
Recently, it has organized meetings in recent months with experts to study the impact of international crises on monetary policy.
Importantly, this represents a clear shift from its approach in previous years.
In the same vein, the French government is preparing to hold a ministerial meeting
to assess its efforts over the past years regarding defense preparedness.
The meeting will focus on the industrial sector’s ability to meet growing demand amidst rapidly changing international circumstances.
Moreover, the government also seeks to ensure a balance between security requirements and the stability of the national economy.
