The Prime Minister of France was dismissed by the Parliament. Francois Bayrou had asked for a vote of trust for budget reform
Francois Bayrou in the National Assembly of France Photo: Antonin Burat / Zuma Press / Profimedia
The Parliament of France did not give Prime Minister Francois Bayro the vote on his confidence for reducing the growing public debt, which deepens the political crisis and puts President Emmanuel Macron in search of a fifth prime minister in less than two years, informs Reuters.
Francois Bayrou (74 years old) had taken over the position only nine months ago. Now he is forced to resign, leaving Macron with low options, given that financial markets show their concern about France's political and fiscal crisis.
Against the granting of the confidence, 364 deputies from the opposition ranks voted, going from the far right to the far left, in favor of the government voting only 194 deputies.
“You do not have the power to delete reality”
Bayrou had unexpectedly demanded the vote of confidence in an attempt to obtain parliamentary support for his strategy to reduce the deficit almost double compared to the maximum ceiling allowed by the EU, 3%, and the level of public debt reached 114% of GDP. But the opposition parties were not willing to support a reduction of the expenses of 44 billion euros in 2026, given that the French must choose a successor of Macron in 2027.
Macron could nominate as a prime minister a politician in his centurier formation or a conservative, but that would mean resumed the same strategy that failed in the formation of a stable alliance. Another option would be to change the course to the left and to nominate a moderate socialist or choose a technocrat.
In none of these scenarios it seems probable to set up a parliamentary majority to support the government. Before the vote, Finance Minister Eric Lombard said it is inevitable that the formation of a new government dilutes the deficit reduction plan.
Macron could still convene early elections, but so far it has not ran the requests from the extreme-right party the National and Extreme-Stânga France meeting to dissolve the Parliament again.
The most pressing task of the future government will be to pass a budget through the Parliament, the same challenge that Bayrou faced.
“You have the power to take down the Government, but you do not have the power to delete the reality. The reality will remain unclear: the expenses will continue to increase, and the burden of debt, already unbearable, will become even more difficult and more expensive,” Bayrou said before the vote in Parliament, adding that “it is in the game”.
Summer Perspectives for State Financing
France has the largest deficit compared to GDP in all the countries of the euro area. The Fitch rating agency is expected to review on September 12, the AA- with negative perspective of France, followed by the evaluations of Moody's and S&P Global, in October and November. A relegation would mean difficulty for France to get small interest funding from investors, which could deepen its debt problem.
Macron and the political leaders in the central and conservative parties do not think that the anticipated elections would solve the problem, with discussions with the socialists, sources close to the President of France said.
The French government, on the verge of dismissing, against the background of anger towards the austerity budget / Macron's impossible choice, in a moment of paralysis
The socialists came with a counter-budget that would impose a fee of at least 2% over the assets of more than 100,000,000 euros and would generate revenues of 22 billion euros, a proposal that would be difficult to reconcile with the pro-business agenda of Macron's presidency.
Dissatisfaction could also burst into the street. A protest movement entitled “Bloquons Tout” (“to block everything”) asks the French to go out on Wednesday. Unions want to organize protest marches next week.
