President of the European Central Bank Christine Lagarde attends the Federal Reserve Bank of Kansas City's 2025 Jackson Hole Economic Symposium, “Labor Markets in Transition: Demographics, Productivity, and Macroeconomic Policy,” in Jackson Hole, Wyoming, U.S., August 23, 2025. REUTERS/Jim Urquhart
PARIS (Reuters) -France is not currently in a situation that would need the International Monetary Fund (IMF) to intervene but any risk of a government falling in the euro zone is "worrying", European Central Bank President Christine Lagarde said on Monday.
Speaking to broadcaster Radio Classique, Lagarde said fiscal discipline remained imperative in France, and that she was looking very attentively at the French bond spreads situation.
French opposition parties have said they will bring down the minority government in the September 8 confidence vote which Prime Minister Francois Bayrou unexpectedly announced last week, over his unpopular plans for a budget squeeze in 2026.
This has hit the stock and bond markets of France, which is the euro zone's second economy.
French banks have come under pressure, but Lagarde said the French banking system was better placed compared to the 2008 financial crisis.
"I believe that the French banking system is well capitalised, that it is in better shape than it was during the last major financial crisis, that it is well structured, well supervised, and has responsible players," she said.
"I do not believe that the banking system itself is in any way the source of the current risk, but markets, in all circumstances of this nature, assess the risk," she added.
(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)
