ECB's Lagarde Warns French Government Collapse Worrying for Eurozone

European Central Bank President Christine Lagarde has expressed serious concern about the potential collapse of the French government, led by Prime Minister Francois Bayrou, following his call for a confidence vote amid opposition to his plans for spending cuts and tax increases. Lagarde emphasized that political instability in any eurozone country, particularly France as the bloc's second-largest economy, impacts financial markets and poses risks to the broader economy. She stated that while France does not currently require International Monetary Fund intervention, fiscal discipline remains crucial, and she is closely monitoring French bond spreads. Additionally, Lagarde warned about the risks to global economic stability if U.S. President Trump succeeds in undermining the independence of the Federal Reserve, which could have significant repercussions worldwide given the Fed's central role in setting interest rates. These comments reflect Lagarde's broader concern about political and economic uncertainties both within the eurozone and internationally.