Governors think Paris should reassure investors

FRANKFURT, June 16 Reuters European Central Bank policymakers have no plan to discuss emergency purchases of French bonds and still think it is for French politicians to reassure investors spooked by the prospect of a farright government, five sources told Reuters.

French financial markets endured a brutal selloff late last week as investors cut their positions ahead of a snap election that might give a majority to the far right, leading some analysts to speculate about an ECB intervention.

But five ECB policymakers, speaking on condition of anonymity given the sensitivity of the situation, said they hadn39;t discussed activating an emergency bondbuying scheme to support French debt, nor do they currently plan to do so.

The sources expressed varying degrees of concern about the magnitude of the selloff in French government bonds, which saw their risk premium over safer German paper rise by the most since the 2011 euro zone debt crisis.

But they generally agreed it was for French politicians to convince investors that they would run a sensible economic policy. Two sources even suggested the ECB should not intervene before a new French government is formed and fiscal plans announced.

An ECB spokesperson declined to comment.

The ECB39;s Transmission Protection Instrument TPI allows it to buy unlimited amounts of bonds from a country that finds itself under market pressure, but only for as long as it complies with…