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Villeroy opposes the use of “helicopter money” to meet inflation targets

PARIS – Villeroy de Galhau, the governor of the Banque de France, disagrees with the analysis of the Economic Analysis Council which recommends the use by the European Central Bank (ECB) of “helicopter money” to achieve the objectives of ‘inflation.

François Villeroy de Galhau, also a member of the ECB’s Governing Council, said on Wednesday that distributing money to households, sometimes referred to as “helicopter money” would be complex in practice and would dig a “hole” in the balance sheet of the institution.

The Economic Analysis Council (CAE), an independent think tank chaired by the Prime Minister and responsible for advising him, estimated in a report that this instrument could be effective in reviving inflation if the latter remains “too weak persistently”.

The ACE adds that the use of “helicopter money” by the ECB would only be a last resort and associated with other monetary policy tools.

“The helicopter currency, which has never been implemented and would be complex in practice, does not seem to us to be a good idea”, reacted François Villeroy de Galhau in front of senators.

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