PARIS, April 12 (Reuters) - A new French franc would probably depreciate by up to 10 percent should France leave the euro, and banks would be asked to buy French bonds to prevent borrowing costs from spiralling out of control, Marine Le Pen’s economic adviser said on Wednesday.
The far-right presidential candidate’s plans to ditch the euro and hold a referendum on European Union membership have spooked many investors, who fear a “Frexit” after British voters opted last year to leave the EU.
Polls suggest Le Pen may make it to the second round of voting, in the presidential election, but then fall short.
Her economic adviser, Bernard Monot, said a depreciation of a new French currency would not have dire consequences and would help France regain competitiveness against the euro zone’s biggest economy Germany.
After the new franc is introduced at an exchange rate of one franc to the euro, currency “adjustments” would occur, he said:
“Probably a depreciation of 5 to 10 percent of the French franc compared with the average rate of the euro zone,” he told the French association of financial journalists, AJEF.
Seeking to reassure business leaders last month, Le Pen herself said that she did not expect the re-introduction of French francs to lead to a devaluation.
Monot said there would be no panic on financial markets and said there would be no need to introduce capital controls because French banks would be required to buy French sovereign bonds.
“We will ask them to play the patriotic game,” he said. “In principle, there won’t be any capital controls because we will use the banking system to refinance part of the debt.”
Asked if French banks would have to be nationalised to force them to implement Le Pen’s monetary policy, Monot said: “In principle, no, unless they ask for it.”
Le Pen has also said that the Bank of France would be given a new mandate that would allow it to print money in order to finance state borrowing. (Reporting by Michel Rose; Editing by Leigh Thomas/Jeremy Gaunt)