France's far-right and left-wing lawmakers joined forces on Wednesday in a historic no-confidence vote fueled by budget disputes that will force French Prime Minister Michel Barnier and members of his cabinet to resign, the first since 1962.
The National Assembly approved the motion with 331 votes. At least 288 were required.
The President of France, Emmanuel Macron, said he would attend the rest of his term until 2027. However, he will have to appoint a new prime minister for the second time after the July legislative elections leading to a very divided parliament.
Macron will address the French public on Thursday night, his office said, without giving details. Barnier is expected to formally step down by then.
Barnier, keeper appointed in Septemberbecame the shortest prime minister of the new French Republic.
“I can tell you that I will continue to be honored to have served France and the French with honor,” Barnier said in his final speech before the vote. everything worse and harder. That's what I'm sure of.”
The crucial vote came up on Wednesday strongly against the budget proposed by Barnier.
No party has a majority
The National Assembly, France's lower house of parliament, is deeply fractured, with no single party holding a majority. It includes three main blocs: Macron's centrist allies, the left-wing coalition New Popular Front and the far-right National Rally.
The two opposition blocs, normally at odds with each other, are uniting against Barnier, accusing him of imposing austerity measures and not responding to the needs of citizens.
Speaking on TF1 television after the vote, Marine Le Pen of the National Rally said “we have a choice to make, and our choice is to protect the French” from a “toxic” budget.
Le Pen also accused Macron of being “very responsible for the current situation,” adding that “the pressure on the president of the Republic will become stronger and stronger.”
Speaking in the National Assembly before the vote, hard-left lawmaker Éric Coquerel called on the government to “stop pretending the lights will go out,” a ' note that an emergency law could raise fees starting on January 1, based on this. rules of the year.
“The special law will prevent closures. It allows us to get through the end of the year by delaying the budget by a few weeks,” said Coquerel.
Broken legislation
Macron must appoint a new prime minister, but the fragmented parliament remains unchanged. No new legislative elections can be held until at least July, creating a potential dilemma for policy makers.
During a visit to Saudi Arabia earlier this week, he said talks about his possible resignation were “credible politics,” according to French media reports.
“I am here because I have been elected twice by the French people,” Macron said. He was also reported as saying: “We must not scare people with things like that. We have a strong economy.”
While France is not at risk of a US-style government shutdown, political instability could rattle financial markets.
France is under pressure from the European Union to reduce its huge debt. It is estimated that the country's deficit will reach six percent of gross domestic product this year, and analysts say it could rise to seven percent next year without major changes.
The political instability could push up French interest rates, digging the debt even further.
Carsten Brzeski, head of global macro at ING Bank, said that uncertainty about the future of the French government and finances is hindering investment and growth.
“It is clear that the effect of not having a government in France would be negative for the growth of France and therefore the euro area,” said Brzeski.
France has seen bond market borrowing costs rise, bringing back ugly memories of the Greek debt crisis and default in 2010-12.
Analysts say France is far from a similar crisis because much of the outstanding debt doesn't come due for years and because demand is still on its bonds due to the shortage of German government bonds. In addition, the European Central Bank could intervene to reduce French borrowing costs in the event of serious market turmoil, although the bar for that remains high.
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