France’s government was ousted after lawmakers voted in favor of a no-confidence motion on Dec. 4.
The National Assembly passed the no-confidence motion with 331 votes, surpassing the 288-vote simple majority needed.
This is the first time in six decades that a government of the Fifth Republic has fallen in such fashion.
The move has set the eurozone’s second-biggest economy sailing on a course bound for political and economic turbulence.
The no-confidence vote removes Michel Barnier from his role as prime minister. French President Emmanuel Macron appointed Barnier to the position in September.
Barnier encountered resistance in the weeks that followed as he pushed a financial plan aimed at curbing France’s budget deficit. In a last appeal before the vote, Barnier said the deficit “will not disappear by the magic of a motion of censure.”
In the National Assembly, France’s parliamentary lower house, no single party holds a majority after a snap election called by Macron in June.
It now comprises three major blocs: the president’s allies, a leftist coalition known as the New Popular Front, and the right-wing Rassemblement National (RN).
In an unusual turn of events, both the left and right united in a political pincer movement on Macron’s centrist allies, led by Barnier, accusing the prime minister of failing to address citizens’ needs while imposing austerity measures.
Now that the Barnier government has fallen, Macron must appoint a new prime minister, but the divided Parliament will have the same makeup, making political stasis in Paris highly likely, as no new legislative elections can be held until July 2025 at the earliest.
Though this does not mean France risks a U.S.-style government shutdown, it may rattle the financial markets, further damaging the nation’s already fraught economic situation.
Ahead of his ouster, Barnier warned of “a big storm and very serious turbulence on the financial markets” if his budget bill were to be rejected by the French Parliament.
His draft budget sought to cut the deficit, which is projected to exceed 6 percent of France’s gross domestic product (GDP) this year, with 60 billion euros ($63 billion) in tax hikes and spending cuts to drag the deficit down to 5 percent next year.
The incoming caretaker government could put forward emergency legislation to roll over spending limits and tax provisions from this year, but that would mean Barnier’s savings measures would fall by the wayside and the deficit would not be addressed.
The European Union advises member states not to let their fiscal deficits rise above 3 percent of GDP.
Macron, who won a second term in 2022, attempted to avoid this crisis by calling a snap parliamentary election in June.
His term runs until mid-2027, and he cannot be ousted by Parliament but is likely to face serious opposition on both his left and right flanks, with the RN and the New Popular Front already calling for his resignation.
Macron has vowed to remain in the Elysee Palace for the duration of his term.
He may also ask Barnier to stay on in a caretaker role, as it could take some time to appoint a new prime minister.
The government’s call has already unsettled financial markets, with borrowing costs rising sharply amid fears of instability and the euro continuing to weaken against the dollar.
