- Bayrou loses the vote of trust in Parliament.
- His defeat deepens the political crisis in France.
- France is under pressure to fix its finances.
The Parliament of France voted on Monday to demolish the government about its plans to tame the national debt of Globo, deepen a political crisis and deliver to President Emmanuel Macron the task of finding a fifth prime minister in less than two years.
Francois Bayrou, 74, assumed the position of Prime Minister only nine months ago. Now he must present his resignation, leaving Macron to face a set of narrowing options, with the financial markets that indicate concern for the political and fiscal crisis of France.
Bayrou had unexpectedly called the vote to try to gain parliamentary support for its strategy to reduce a deficit that is almost twice the roof of 3% of the European Union and start addressing a debt stack equivalent to 114% of GDP.
But the opposition parties were in humor to meet behind their planned savings of 44 billion euros ($ 51,51 billion) in next year's budget, with an election for Macron's successor in 2027.
Macron could now nominate a politician from his own centrist minority ruling group or the ranks of the conservatives as the next prime minister, but that would mean duplicating a strategy that has failed to produce a stable alliance.
I could attack the left and nominate a moderate socialist, or choose a technocrat.
No scenario is likely to give the next government a parliamentary majority. It was inevitable that the need to form a new government would result in a dilution of the deficit reduction plan, said finance minister Eric Lombard, before the vote.
Macron can eventually decide that the only way out of the crisis lies in calling a quick choice, but so far the calls of the national right -wing and the hard left -wing France have resisted that they do not strive to dissolve the Parliament for the second time.
Fiscal disorder
The most pressing task of the next government will be to approve a budget, the same challenge that Bayrou faced when he assumed the position.
“You have the power to tear down the government, but you don't have the power to erase reality,” Bayrou said legislators before the vote of trust.
“Reality will continue to be relentless: expenses will continue to increase, and the debt load, already unbearable, will become heavier and more expensive,” he said.
The “France's much survival is at stake,” he said.
The EU partners of France will be observing closely.
France has the greatest deficit as a percentage of GDP in the euro zone: the block using the EU unique currency. Pay more to serve your debt than Spain and differences against 10 -year reference German bonds are at its highest level in four months.
Fitch, often seen as a first engine among the qualification agencies, reviews its AA-qualification with a negative perspective on September 12. Moody's and S&P global, which have equivalent grades, continue in October and November.
A reduction would hinder the ability of France to raise money at low interest rates of investors, potentially deepening their debt problems.
A long period of political and fiscal uncertainty runs the risk of undermining Macron's influence in Europe at a time when the United States is talking hard about trade and security, and war is in Ukraine on the eastern flank of Europe.
Macron and the political figures of centrist and conservative parties consider that a rapid choice would not solve the crisis and that conversations with the socialists should be followed, two sources familiar with Macron's thinking said.
The Socialists have offered a counterpted that would impose a tax of at least 2% in personal wealth of more than 100 million euros and generate savings of 22 billion euros, a proposal that would be difficult to marry the Pro-Empresa reform agenda of the Macron Presidency.
Discontent can also start preparing in the streets. A base protest movement called “Tout Blos” (“We block everything”) is asking for a national interruption on Wednesday. The unions are planning strikes the following week.
“France is over,” said Mohamed, 80, a retired hospital worker who sells products in the lighter market in Paris.
