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Home Feature Economy

French Government In Jeopardy After No-Confidence Vote Over Budget Dispute

The Global Economics by The Global Economics
December 3, 2024
in Economy, Top Stories
Reading Time: 4 mins read
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French Government In Jeopardy After No-Confidence Vote Over Budget Dispute

French Government In Jeopardy After No-Confidence Vote Over Budget Dispute

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After Barnier attempted to force budget changes without parliamentary approval, France’s far-right National Rally announced filing a no-confidence vote against him.

The government of French Prime Minister Michel Barnier is facing danger of collapsing as the left and right-wing groups propose a no-confidence vote on the government due to the budget dispute.

After Barnier attempted to force budget changes without parliamentary approval using article 49.3, Marine Le Pen, the leader of France’s far-right National Rally (RN), announced that her party would file a no-confidence resolution against him.

Left-wing politicians plan to introduce a similar motion. RN and they have enough votes to overthrow the prime minister.

Article 49.3 of France’s constitution allows the government to pass new laws without the parliament’s approval. But, it also gives the MPs the chance to challenge that decision by submitting a no-confidence resolution within 24 hours. If the motion is approved, the law gets rejected, and the government is said to have collapsed.

In response to the far-right demands, Barnier announced later that he would eliminate electricity price increases and cut healthcare coverage for unauthorized migrants. The National Assembly, the lower house of the French parliament, will schedule the budget vote.

The prime minister’s minority government, supported by a coalition of conservation and centrist lawmakers, lacked the votes to approve the law without the RN’s backing.

His concession was a desperate attempt to stay in office and maintain the government budgetary plan. Le Pen, however, accused Barnier of not paying attention to the political groups opposed to the bill, and their party’s budget demands had not been fulfilled.  

He defended his decision and urged French lawmakers to avoid pushing the country into crisis. He stated that it is up to us to determine whether France gets an indispensable budget.

A vote of no confidence is expected as early as Wednesday. If the Barnier government dismisses, it would be the first time French lawmakers have done so since 1958. He would also be the shortest-serving prime minister.

President Emmanuel Macron rejected the New Popular Front (NFP) claim to choose the next head of government and selected Barnier in September to unite the divided politics. After hasty legislative elections and a vacant parliament, his nomination was an attempt to end two months of uncertainty.

After the elections, a coalition of left-wing parties, NFP, became the biggest party in the parliament. The left had partnered with Macron to stop Le Pen’s RN from winning, but it was infuriated when Barnier, a right-wing politician, was appointed.

Barnier wanted to keep RNs on board as long as possible by compromising on some of the far right red lines, like steps to lower the cost of living, while being tough on hot-button concerns like immigration, crime, and security.

The prime minister wanted to repair France’s financial crisis, which included a budget deficit of 5.5% of GDP in 2023, which will increase to 6.1% this year.

The government proposed the 2025 budget, which includes €40 billion in public spending reductions and €20 billion (£16.5 billion) in tax rises. Despite significant compromises from the government, the RN has rejected portions of the first of the two bills that make up the budget, passed by the end of 2024.

Macron will continue as the president until spring 2027, even if Barnier and his cabinet get dismissed. However, Macron had to choose a new prime minister after his powers weakened after the July surprise general elections.

Macron may ask political parties to form a new coalition or a technocratic government until new legislative elections occur this summer. No general election will occur within a year of the last election.

French markets have been agitated in recent weeks due to negotiations over budget measures, which temporarily raised Paris’s borrowing costs above Greece’s and hurt France’s share market.

There is no fear of a US-style shutdown since the French constitution allows a caretaker government to pass an emergency law to extend a previous year’s budget for a few months, ensuring that public sector employees still receive their salaries.

Source: short URL
Tags: budget disputeEmmanuel MacronMichel Barnierno confidence vote
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The Global Economics

The Global Economics Limited is a UK based financial publication and a bi-annual business magazine giving thoughful insights into the financial sectors on various industries across the world. Our highlight is the prestigious country specific Annual Global Economics awards program where the best performers in various financial sectors are identified worldwide and honoured.

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