Following the resignation of Michel Barnier’s government after a no-confidence vote in the National Assembly, French President Emmanuel Macron pledged to remain in office until the end of his term in 2027. He stated that the name of the new prime minister would be announced within days.

Key Points from Macron’s Address

• Reasons for the resignation: Macron blamed opposition forces from the far right and left for creating an “anti-republican front” driven by political self-interest.
• Acknowledgment of responsibility: The President admitted his share of responsibility for the crisis, which has destabilized domestic politics and financial markets.
• Budget as a priority: The new government will focus on passing the 2025 budget, a critical step to address the current economic challenges.

Economic Implications

The political turmoil has raised concerns among investors about France’s growing debt, projected to reach 7% of GDP next year without substantial reforms. Analysts warn that Barnier’s government collapse and ongoing uncertainty could lead to higher borrowing costs for France, exacerbating the debt problem.

Challenges for the New Prime Minister

The appointment of a new prime minister is crucial for restoring both domestic and international confidence. The main tasks for the incoming head of government include:

1. Reassuring markets: Ensuring the passage of a budget to reduce debt and reinforce economic stability.
2. Political stabilization: Forming a coalition capable of avoiding further crises.
3. Restoring trust: Rebuilding dialogue with the opposition and the public.

Political Context

The no-confidence vote marks the first government resignation in France since 1962. This has deepened political divisions, with far-right and left-wing parties gaining momentum by opposing Macron’s policies.

Macron faces a significant challenge: not only resolving the current crisis but also maintaining his authority amidst growing opposition.