What happens next in France after another PM is ousted?
After a meeting with French President Emmanuel Macron, US President Donald Trump, Ukrainian President Volodymyr Zelenskiy and European leaders, he speaks the Russian war in Ukraine in Washington, DC, USA, on August 18, 2025.
Yves Herman | Reuters
France, after the budget locking another prime minister was transferred to more political chaos this week.
Prime Minister Francois Bayrou and the central minority government lost the vote of confidence on Monday and a total of 364 deputies voted against the government and in favor of only 194.
In 2024, Bayrou’s 2026 budget deficit in 2024, which aims to reduce the gross domestic product (GDP) to 5.8%, was largely expected to collapse from the last government after not being able to gain support from political competitors for 2026 budget plans.
The Bayrou government aimed at approximately 44 billion euros ($ 52 billion) deductions in the next year’s budget to reduce the deficit to 4.6% of GDP in 2026.
France’s financial markets reacted calmly to the latest political turmoil with CAC 40 0.25% higher. The return of France’s 10 -year bond was 2 basis points higher in 3,4755% on Tuesday morning, and the latest political uncertainty from Paris reflects the tension on the latest dose of economic uncertainty.
Bayrou will give his resignation letter to the French President Emmanuel Macron on Tuesday and a new government and Premier will be nominated in the next few days.
None of the options available for Macron will appeal to him.
Macron can choose a new prime minister – in less than two years, the fifth PM – or a technocratic government can create a technocratic government, but both movements will face the same political opposition against budget cuts. The president may also call another parliamentary election, but this can give an inconclusive result or give more seats to the far -right national rally or the French Unbave Party on the left.
Macron will seem to choose an ally ally to lead the government, but he will have to find a candidate who can unite different political positions and demands.
On Tuesday morning, Deutsche Bank would require an undesirable PM in the right national rally and the national rally on the left and the left-hand focus call for additional elections and require an PM that could keep the current center-right coalition on board. ” He said.
According to JPMorgan Senior Economist Raphael Brun-Nuerre, negotiations between Macron and various parties will need to be monitored.
“The election of a new sub -house cannot be ignored, but Macron will put pressure on a large coalition government.”
During the Pot de de Bayrou, Bye Bye Bayrou’s Francois Bayrou in Paris on September 8, 2025, Paris is a sign that organized a rally in front of Paris’s 20th City Hall.
Bastien Ohier | AFP | Getty Images
In both cases, the government is likely to consider financial consolidation to some extent next year, and Brun-Sharere said, “It would be difficult for future governments to escape from this issue.”
The problem is just happening How To cope with financial consolidation.
“Almost all parties agree on the terrible state of France’s public finance, although political camps are strongly divided by welfare reforms or tax hikes,” Teneo Deputy Director Carsten Nickel said on Monday. He said.
Although France has an experience of the President and Prime Minister from different political families under a structure known as “living together”, it is not part of the political culture of the country called “Great Coalitions” in the National Assembly.
“This makes it difficult to seek great compromises that require a mixture of both approaches to the country’s financial challenges,” Nickel said.
Immediately uprising
A new prime minister also called on the unions on September 10th and 18th of September, calling for anti -nation -class protests, and will take a measure of public anger on proposed expenditure interruptions and reforms.
However, France’s need to reduce the budget deficit continues to be a priority, and this week, when the Fitch Ratings Agency has published an update about the third largest economy of Europe and is currently evaluated with a negative appearance in ‘AA-‘ ‘, a sense of urgency may be affected.
Berenberg Bank’s chief economist Holger Schmieding, said on Tuesday, a fitch fall on Friday as a “big surprise” will not come, the loan “French bonds seem to be possible for rating decreases,” he said.
Nevertheless, he warned that “a real financial crisis” with a “self -reinforcement cycle,” with higher bond returns that leads to greater budget deficits and even higher borrowing costs. “
“With its almost balanced current account, France is not a significant candidate for the financial crisis. Of course, we cannot completely be excluded. If the French socialists who balance the power of power in a deeply divided parliament continue to reject common sense and insist on unexplained demands, the risk may rise.”
