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French Prime Minister Michel Barnier’s government faces a no-confidence vote in the coming days after he took action on a draft budget without parliamentary approval.
Barnier activated Article 49.3 of the French constitution on Monday to push through the first part of his proposed 60 billion euro fiscal package of tax increases and spending cuts. He lacks a majority in the National Assembly.
Marine Le Pen’s far-right opposition party, the National Assembly, said on X immediately after the move that it would “vote to condemn the government”.
The far-left France Unbowed party also confirmed it would table a vote of no confidence in the coming hours.
Barnier defended his decision and urged French lawmakers not to plunge the country into crisis.
“We have arrived at the moment of truth. . . Now the members of parliament are deciding whether our country will get a responsible, irreplaceable budget, or whether we will step into uncharted territory,” he said.
“I arrived at a dialogue that was possible with all political groups, always remaining open and listening.”
The fight for budget measures roiled French markets in recent weeks, briefly lifting the value of Paris’s debt above that of Greece and undermining France’s stock market.
French shares fell slightly on Monday as investors reacted negatively to heightened political risks, while the euro continued to weaken, falling 1 percent to $1.047.
The country’s sovereign bonds weakened after Barnier’s decision to invoke the constitutional clause, sending the yield on the 10-year bond up 0.02 percentage point to 2.92 percent, while other euro zone bonds rose.
The spread on Germany’s benchmark 10-year bond, a key measure of risk, hit 0.88 percent, close to last week’s 12-year high.
If Barnier’s government is dismissed this week, it will be only the second time French lawmakers have taken such a step since the Fifth Republic was formed in 1958. It would also make Barnier the shortest-serving prime minister in the same period.
Barnier was blocked on Monday in the latest talks with Le Pen’s party on the financial package. But they have so far proved fruitless, despite Bagnier conceding two of the RN’s three demands.
