France: Michel Barnier Government Falls

The government of Prime Minister Michel Barnier has just lost a no-confidence vote in the National Assembly of France. The development will usher France into an era of uncertainty.

The government was composed three months ago after President Macron called and lost snap legislative elections which saw parties of the extreme right and left emerge victorious.

Rightwing leader, Jean-Marie Le Pen, is seen as the architect of the fall of the Barnier government; she is judged to have made demand upon demand on France’s 2025 budget which would make it impossible to meet targets to reduce the budget deficit.

Barnier’s Ill-Fated 2025 Budget

Michel Barnier had in a bid to address France’s fiscal deficit presented a budget which seeks to reduce budget deficit from 6.1% of GDP in 2024 to 5% in 2025.

To achieve this Barnier proposes €60 billion in adjustments: €40 billion in spending cuts and €20 billion in temporary tax hikes aimed at increasing government revenue.

The spending cuts was to be achieved by implementing reductions in the amount allocated to social services like healthcare, pensions, and unemployment benefits. He also planned to balance job cuts in the education sector through investments in student support for learning disabilities. The budget also proposes the removal of energy price caps and deferred pension.

The budget also proposes temporary tax hikes for large corporations and wealthy individuals. Companies earning between €1-3 billion will face a 30% tax, while profits above €3 billion face 36% tax in addition to increased taxes for wealthy individuals earning over €250,000 annually.

Political Opposition and Controversial Move

The budget proposal was met with stiff resistance by opposition lawmakers led by Marine Le Pen, the parliamentary leader of the far – right RN and other leftist lawmakers.

Sensing his coalition party would not get enough votes to pass the bill in parliament, Barnier decided to force through the bill by invoking the controversial Article 49.3 of the French constitution which allows the prime minister, “after deliberation by the Council of Ministers,” to force a bill through the National Assembly with no vote.

In such a situation, the only alternative to prevent the bill from passing is then to overthrow the government by passing a vote of no-confidence.

No-Confidence Vote

Barnier’s government collapsed after just three months as 331 MPs in the 577 member house voted in support of the no-confidence motion, far more than the 288 required for it to pass. This marks the first passing of a no-confidence vote in the French parliament since 1962.

What Next For France?

The no-confidence vote is the latest occurrence in the political crisis that has rocked France in recent times. Barnier had presided over a minority government since September after an inconclusive general legislative election.

Barnier’s three-month tenure in charge of the fractured parliament is the shortest lived in France’s Fifth Republic beginning in 1958. He is expected to tender his resignation before Thursday runs out.

The absence of a 2025 budget leaves France’s economy in limbo, exacerbating concerns about fiscal stability and investor confidence.

French President, Emmanuel Macron is expected to announce a new Prime Minister for the parliament in the coming days but governing will remain challenging given the fragmented Assembly.

Macron has reiterated he is going to remain in office until his second tenure as president elapses in 2027.

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