French President Emmanuel Macron began looking for another prime minister yesterday after the far right joined forces with the left to push through a no-confidence motion against his government over a budget dispute.
The French president needs to find a prime minister who can pass next year’s budget through a deeply divided parliament, but any new leader would face the same financial squeeze that brought down French Prime Minister Michel Barnier’s administration.
The French president was due to address the nation after press time last night.
Photo: EPA-EFE
The budget bill that sank Barnier’s government contained 60 billion euros (US$63.3 billion) in tax increases and spending cuts that aimed for a reduction in the deficit to 5 percent of economic output next year, from an estimated 6.1 percent this year.
“This budget was toxic for the French,” National Rally leader Marine le Pen said in an interview on French television after she voted to bring down the administration.
Instead, the country needs “a budget that’s acceptable to all,” she said.
The chaos in the EU’s second-biggest economy has prompted bond investors to punish France’s sovereign debt relative to its peers and Barnier had warned of a “storm” in financial markets if he was ousted.
Bonds and the euro were unrattled by the vote, with the 10-year yield ticking lower and the common currency trading little changed. The extra yield investors demand to hold French debt rather than safer German notes declined to 81 basis points.
Barnier, a seasoned conservative and previously the EU’s chief Brexit negotiator, was only appointed in September, making his tenure the shortest for any prime minister since France’s Fifth Republic was founded in 1958. He is also the first French prime minister to lose a no-confidence vote in more than 60 years.
Macron has the authority to appoint a new prime minister, but he had a lengthy struggle before he managed to win limited support for Barnier from a fragmented parliament.
Le Pen said that she is willing to work with another government, so long as they work with her party to draw up the budget.
Macron has said he would not step down until his term ends in 2027 and he cannot be forced out of his job.
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