Paris on the Edge
Paris on the Edge
The Barnier government was impeached by the National Assembly, and France’s crisis might become a problem for the entire European Union. Just two months after the French government was formed, it collapsed over the budget bill, and only a few weeks after Germany’s political crisis, it opened Europe’s doors to another political crisis.
As widely announced in recent days, Parliament passed a no-confidence motion against Prime Minister and former European negotiator Michel Barnier. Those who ended his government were jointly the National Rally (RN) movement led by Marine Le Pen and the left-wing parties united in the Nouveau Front Populaire. These parties, like the far-right extremists, oppose the 2025 financial plan.
The fate of the government seemed clear from the moment the Prime Minister invoked Article 49.3 of the Constitution to reduce the terrible public budget deficit and to overcome parliamentary opposition.
This article allows the government to pass laws without a vote in the parliamentary chamber unless a no-confidence motion is presented within the next 24 hours.
Towards a Debt Crisis
Michel Barnier, 73, who was appointed Prime Minister at Matignon in early September, received a specific mission from the Élysée: to reduce France’s massive public debt and prevent the risk of a financial crisis for the Eurozone’s second-largest economy. The plan included cutting costs by 40 billion euros and increasing taxes by 20 billion euros.
However, his efforts, like the concessions offered to far-right extremists in areas of taxes, electricity, and health, failed against the red lines drawn by Marine Le Pen.
Ultimately, the Prime Minister yielded to the National Rally RN leader’s demand to withdraw the temporary suspension of pension reforms.
The French, as the former European Commissioner announced, will not forgive us for prioritizing special interests over the nation’s future. The no-confidence vote rattled the markets, with French securities equaling Greek ones today, and the interest rate gap with Germany reaching the 2012 crisis level. The economic world is worried about France’s stability.
What Happens Now?
With 89 days in office, Barnier’s government will be remembered as the shortest in the history of France’s Fifth Republic and the first to be toppled by a no-confidence vote since Georges Pompidou’s government in 1962. According to the Constitution, the President cannot hold new elections before next July, so Emmanuel Macron is currently seeking a new Prime Minister who can extend the budget and possibly last until next summer.
In this unprecedented situation, the Élysée President tries to present himself as a pillar of stability, downplaying predictions of a financial storm engulfing France, and urges the media not to scare the public. ‘We have a strong economy,’ he said. ‘France is a resilient country that has implemented and maintained many reforms, a country with stable institutions and a solid Constitution.’ In response to reporters’ questions about whether he considers resigning before the end of his presidential term in 2027 to break the deadlock, he firmly said, ‘This is a political fantasy.’
Now, with the fall of the French government and the ensuing economic crisis, many questions arise about the future of the country and the European Union. A new Prime Minister or possibly an interim government must be formed to manage the economic situation, but political instability could erode confidence in France and negatively impact financial markets and the Eurozone economy. Additionally, the risk of increasing debt and a financial crisis looms, especially given the deep political divides within the country. In this scenario, the European Union and other member states will likely have increased oversight of France’s situation to prevent the crisis from spreading.
Europe’s Perfect Storm
Without a government, with an uncertain budget, and an economy under pressure, France’s crisis could have serious consequences for the entire European Union. Barnier, who was supposed to bring France back to financial discipline, was a guarantee for Brussels. His government’s fall could endanger the Eurozone’s stability, but the issue goes beyond this.
France’s political crisis, coupled with uncertainty in Germany, which is grappling with deep economic problems and is in the midst of election campaigns, is dragging Europe into uncharted waters. Crises in Berlin and Paris have paralyzed Brussels, condemning it to inaction both domestically and in foreign policy. The France-Germany engine has stalled just when this continent is called upon to face a series of worrying challenges. The war in Ukraine and the Middle East, and in January, Donald Trump’s return to the White House, and all these scenarios require a strong and united European Union, exactly the opposite of what it seems today.
Michel Barnier steps aside as the shortest-serving Prime Minister in French history. He had managed to reach an agreement in tough negotiations between the European Union and Britain, but at home, he faced an impossible mission. Marine Le Pen, along with the left, did not support him, and because he did not want to take responsibility for public budget cuts, his government fell, regardless of the markets continuing to penalize France.
This is very bad news for Europe because another major country, Germany, is also heading for early elections.
Europe’s engine has stopped, and no one seems to know how to fix it, while Trump across the ocean is revving his engines, and conflicts continue in the south and east. Europe is at risk of appearing weaker in the eyes of the world than ever before.
