Why did Michel Barnier’s government in France collapse?

France’s political landscape was thrown into disarray as Michel Barnier’s government, which lasted just three months, collapsed after a dramatic no-confidence vote in the National Assembly.

At the heart of this unprecedented downfall were controversial budget proposals for 2025, designed to tackle France’s mounting fiscal challenges but met with fierce resistance across the political spectrum.

Proposed budget triggered Barnier’s fall

Michel Barnier, a seasoned conservative and former EU Brexit negotiator, introduced a budget plan aimed at slashing France’s deficit.

His proposal sought to reduce the deficit from 6.1% of GDP in 2024 to 5% in 2025 through €60 billion in tax hikes and spending cuts.

While intended to stabilize France’s finances, the austerity measures sparked widespread backlash, with opposition leaders accusing Barnier of being out of touch with voters grappling with economic hardship.

Barnier’s government faced additional criticism for using special constitutional powers to push through parts of the budget without full parliamentary approval, further alienating lawmakers.

The culmination of discontent came when 331 legislators voted in favor of the no-confidence motion, sealing Barnier’s fate and marking the shortest tenure for a French prime minister since the establishment of the Fifth Republic in 1958.

A no-confidence vote is a parliamentary tool used to challenge a government’s legitimacy.

If a majority of lawmakers support the motion, the government is forced to resign.

In Barnier’s case, the vote not only ended his tenure but also plunged France into a period of uncertainty as the search for a new leader began.

Divisions within France’s political landscape

Barnier’s ousting has exposed deep divisions within France’s political landscape.

President Emmanuel Macron now faces the daunting task of navigating a fragmented National Assembly where his centrist coalition no longer commands a majority.

The opposition is dominated by Marine Le Pen’s National Rally and a coalition of left-wing parties, both of which united against Barnier’s budget.

Le Pen has seized the political moment, calling for Macron’s resignation and positioning herself as a frontrunner for the next presidential election.

While she opposed Barnier’s fiscal plan, she has indicated a willingness to collaborate with any future government aligned with her party’s economic priorities.

Political instability in Paris risks undermining investor confidence

The collapse of Barnier’s government comes at a critical time for France, the EU’s second-largest economy.

Political instability in Paris risks undermining investor confidence, with French bond futures already slipping after the vote.

Barnier himself had warned of market turbulence in the event of his ousting, a prediction that now looms large over France’s economic outlook.

For Macron, the challenge extends beyond selecting a new prime minister.

He must also secure parliamentary backing for a 2025 budget amid mounting pressure to avoid a government shutdown.

Finance Minister Antoine Armand has cautioned that failure to pass a budget could lead to emergency tax hikes and spending cuts, further straining public sentiment.

The caretaker government will function temporarily, but its ability to enact critical reforms is severely limited.

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