German Finance Minister: May Oppose ECB Intervention in French Bond Decline

June 28th, Jin10 data - German Finance Minister Olaf Scholz said that if the French parliamentary elections trigger a significant sell-off of the country's government bonds, the European Central Bank's intervention may be in violation of the law. Scholz said at an event hosted by the IFO Institute on Thursday that the strong intervention of the European Central Bank would raise economic and constitutional issues. He mentioned the tools available to the central bank under the Transmission Protection Mechanism (TPM), saying that these tools have so far only remained at the level of press releases and their use "will depend on whether they comply with the treaty law", which is why he does not want to do this. French President Emmanuel Macron's unexpected announcement of early parliamentary elections on June 9th has made bond investors uneasy, and the yield spread between German and French government bonds expanded slightly again on Thursday, rising to 83 basis points at one point, indicating that investors are still concerned about potential political unrest.