ECB’s Villeroy Says Governments Must Tackle Debt as Rates Rise

Euro-area nations must end massive pandemic-era spending and ensure public finances are sustainable as the European Central Bank removes stimulus to tame record inflation, according to Bank of France Governor Francois Villeroy de Galhau.

Surging prices have forced the ECB to plot a more hawkish course involving an end to asset purchases and negative interest rates. Many governments, meanwhile, are boosting spending to ease a cost-of-living squeeze caused by high energy prices and exacerbated by Russia’s invasion of Ukraine.