It is inevitable that France will be discussed at the European Central Bank meeting next week.

Economists at Berenberg Bank pointed out in a report that the European Central Bank will inevitably discuss France at next week's meeting. They believe that the response should include three aspects. "Firstly, given the impact of the French crisis spreading on overall growth and inflation prospects in the eurozone, the European Central Bank needs to take this into account." This further reinforces the rationale for keeping interest rates unchanged; in fact, the market has already lowered its expectations for rate hikes over the past four weeks. Secondly, if the crisis deteriorates further, the European Central Bank may signal that it has tools such as the Transmission Protection Instrument to shield other countries from the contagion. Thirdly, the European Central Bank will emphasize that it can only provide support to France if the country returns to a more sustainable fiscal policy.