A looming no-confidence vote against Prime Minister François Bayrou over a contested budget plan has intensified the French political crisis, forcing President Macron to consider a snap election or appointing a new leader.
Bayrou Faces Imminent No-Confidence Vote
Prime Minister François Bayrou, appointed by President Macron last December, faces a `François Bayrou no-confidence vote` as early as Monday. This follows the resignation of three other prime ministers during 2024, including Michel Barnier who quit last December.
“Bayrou is expected to lose, and all the other parties have vowed to topple the government,” said Elias Haddad, a senior markets strategist at Brown Brothers Harriman.
Controversial France Budget Deficit Plan
The political turmoil stems from Bayrou’s proposed `France budget deficit plan`, which aims to reduce the fiscal deficit to 4.6% of GDP next year. The plan includes savings of 44 billion euros and the elimination of two public holidays.
Opposition parties and organized labor unions have met the proposal with strong resistance. Unions are now threatening work-stoppage strikes in response to the austerity measures.
Macron Weighs Options in French Political Crisis
If the prime minister loses the vote, President Macron must decide the next step. A `Macron snap election possibility` remains on the table, though analysts suggest an alternative is more probable.
“Macron can call a snap election or appoint a new prime minister, but that will be hard given the current situation,” Haddad noted. Leo Barincou, a senior economist at Oxford Economics, stated, “Most likely, Macron appoints another prime minister and makes a minimal budget that won’t be too scary.”
National Rally Prepares for Potential Election
The populist `National Rally Jordan Bardella` is preparing for a potential return to the polls. The party has already selected 85% of its candidates for a possible election.
“We can and must be ready for anything, including a return to the ballot box with a dissolution of the National Assembly,” said Jordan Bardella, president of the National Rally.
Economic Concerns and Market Reaction
The political instability in the European Union’s second-largest economy has drawn concern from the European Central Bank. Yields on French bonds have risen by one-tenth of a percentage point amid the turmoil.
Despite this, analysts do not foresee a broader eurozone crisis. “The underlying demand is still good and unlikely to see a destabilizing situation in the financial markets,” Haddad said, adding that “the bonds are relatively healthy.”
