The French government is teetering on the brink of collapse as it grapples with the passage of its 2025 budget, Bloo,berg reports.
Prime Minister Michel Barnier’s government lacks a majority in the lower house and is likely to invoke Article 49.3 of the constitution, a controversial measure allowing the adoption of the budget without a parliamentary vote.
This move, however, risks triggering a no-confidence vote, which would require the support of both the far-right National Rally and the left-wing New Popular Front alliance. While ideologically opposed, both groups have voiced strong criticism of Barnier’s budgetary proposals.
The National Rally, led by Marine Le Pen, has yet to definitively state its position on the no-confidence vote, according to its finance chief, who spoke Wednesday. While acknowledging the potential for a vote, he stressed that a final decision remains pending. He further downplayed Prime Minister Barnier’s warnings of a “serious storm” in financial markets should the government fall, suggesting alternative legislation could maintain essential state functions, including tax collection, even in the event of budget failure.
The uncertainty surrounding the budget has already rattled financial markets. The spread between French and German 10-year government bonds widened to 90 basis points on Wednesday, its highest level since 2012, reflecting investor concern over the political instability.
Barnier’s government faces a difficult choice. Using Article 49.3 is a risky strategy, potentially leading to a government downfall, while failing to pass the budget could trigger a constitutional crisis.
