Michel Barnier's government is facing two motions of censure provoked by the budget project. In Brussels, the EU institutions follow the financial debates, but also the political difficulties.
ADVERTISEMENT
The European Union has its eyes fixed on the French National Assembly. The government of Prime Minister Michel Barnier is probably living its final hours.
In question? The budget, prepared urgently after the appointment in September of Michel Barnier at the head of a minority coalition. The Christian Democratic leader (Les Républicains) proposes a major effort to reduce the French public deficit estimated at 6.1% this yearto bring it back to 5% in 2025.
“If we talk about a budgetary crisis, France is not in a situation of real budgetary crisis in terms of debt sustainability“, says Andreas Eisl, researcher at the Notre Europe think tank.
The risk exists”if the political crisis continues for several years, (if) we cannot in fact correct the budgetary trajectory which, I think, in the long term is not very sustainable. Slowly, we're going to move into territory that could become problematic. “, he adds.
Michel Barnier is under double pressure. At the national level, the extreme right and the left announce that they want to vote on a motion of censure filed against the government. But the Prime Minister must also bring back France in the nails of the European Stability and Growth Pact. However, France represents the second economic power in the EU where French GDP (Gross Domestic Product) represents 16.6% of EU GDP.
The Prime Minister therefore proposes an effort to 60 billion euros which includes 40 billion in spending reductions and 20 billion in additional revenue. However, these are not so much economic uncertainties which are of immediate concern to the markets, but more so to the political impasse.
“If the Barnier government falls, we do not know if Mr. Macron will maintain Barnier for a while or if he will put another Prime Minister, if he (Emmanuel Macron) will end up resigning, because there are still quite a few world calling on him to resign in France “, underlines Florence Autret who runs the Chutes blog.
In the event of the resignation of the president “that means presidential election, legislative re-elections probably later, in the summer. So that means that we are heading for a sequence where we are faced with an entire semester of political speculation, campaigning, etc., where France will be absent from the game.“
This French political instability will weigh on European debates. The voice of Paris risks being weakened while the new EU institutional teams wish to move forward quickly on the geopolitical, industrial and climatic challenges facing the 27.
