France’s parliament toppled the government on Monday, rejecting Prime Minister François Bayrou’s budget plan and plunging the euro zone’s second-largest economy deeper into a political crisis.
Lawmakers voted 364 to 194 against Bayrou and his minority government. President Emmanuel Macron, under pressure from opposition parties to resign or dissolve parliament, is instead preparing to appoint his fifth prime minister in less than two years. The Élysée said a new premier will be named within days.
The incoming government will face the urgent task of passing a new budget. Bayrou had tried to rally support for his plan to slash the deficit, nearly double the EU’s 3% ceiling, and bring down debt at 114% of GDP. His proposal included €44 billion in savings for 2025, but opposition parties rejected it outright.
Before the vote, Bayrou warned lawmakers: “Expenses will continue to rise, and the burden of debt, already unbearable, will grow heavier.” He is expected to tender his resignation on Tuesday.
Macron Under Pressure
Opposition leaders celebrated Bayrou’s fall. Far-right leader Marine Le Pen called it “the end of the agony of a phantom government” and demanded snap elections. Leftist leader Jean-Luc Mélenchon went further, declaring: “Macron is now on the front line. He too must go.”
Macron faces tough choices. He could pick a successor from his centrist bloc, turn to conservatives, or appoint a moderate socialist or technocrat. None of these scenarios is expected to deliver a parliamentary majority, making it harder to pursue deficit reduction or reform. Finance Minister Eric Lombard said a dilution of fiscal targets was now inevitable.
Analysts warn Macron’s influence in Europe is weakening at a time of U.S. trade pressure and war in Ukraine. Although he may eventually call snap elections, Macron has so far resisted opposition demands to dissolve parliament again.
Financial and Market Impact
Financial markets had anticipated the government’s collapse, limiting the immediate reaction. Still, pressure may grow on Friday, when Fitch Ratings reviews France’s credit rating. Moody’s and S&P Global will follow in October and November.
France already carries the highest deficit-to-GDP ratio in the euro zone and faces higher borrowing costs than Spain. Bond spreads against Germany recently hit a four-month high. A downgrade would further raise France’s debt servicing costs.
The Socialist Party has proposed an alternative budget that includes a 2% wealth tax on assets above €100 million. This would raise about €22 billion, but it conflicts with Macron’s pro-business reform agenda.
Rising Public Discontent
Public frustration is also growing. A grassroots movement called “Bloquons Tout” (Let’s Block Everything) is planning nationwide protests on Wednesday. Trade unions are preparing strikes for the following week.
As Mohamed, an 80-year-old vendor at Paris’s Aligre market, put it: “Come back in 10 days and nothing will have changed. There won’t be a majority. There will be no budget.”
