Will France have a budget at Christmas? The possibility of a motion of no confidence that would bring down Prime Minister Michel Barnier’s government in the coming weeks and leave France without a budget for 2025 is starting to be taken very seriously.
The financial markets felt the tension on Monday. International investors were still on board, and the Treasury raised a drama-free €8.3 billion in the afternoon. However, in the face of political turbulence, banks are now demanding higher interest rates for lending money to the French government. The spread between France and Germany’s 10-year loan rates climbed to 0.83%, its highest level since mid-June. It was only 0.5% before the dissolution of the Assemblée Nationale in June. France now faces higher borrowing costs than Portugal or Spain and is nearing the levels imposed on Greece and Italy.
Read more Subscribers only “Marine Le Pen cultivates the role of kingmaker, the one who holds Michel Barnier’s fate in her hands”
“We’re running the risk of a Greek-style scenario,” warned government spokeswoman Maud Bregeon in The Parisian on Sunday, November 24, referencing the financial crisis Greece experienced in the early 2010s. The key question, she said, is: “Who wants to give to the French as a Christmas present for 2025 a deficit of over 7% and soaring interest rates?”
‘A leap into the unknown’
Far-right leader Marine Le Pen dismissed concerns, stating that there must be no giving in “to the tune of saying, as she left a meeting with Barnier: ‘If this budget is ever rejected, if there is a motion of no confidence, it will be dramatic, it will be chaos, etc.'” Her remarks appeared to pave the way for a potential no-confidence motion against the government, supported by the left and the far-right Rassemblement National (RN). Eric Coquerel, a staunch supporter of the motion of no confidence, also sought to reassure the public. Even if no budget is adopted, there will be “no shutdown, no chaos, no catastrophe,” asserted the radical-left president of the Finance Committee at the Assemblée Nationale, in a video broadcast on Sunday.
Chaos or no chaos? The outcome will depend in part on the timing of any no-confidence motion. Barnier’s opponents are likely to have several opportunities to bring down the government between now and Christmas. Three budgetary texts, currently being examined by the Sénat, will then return to the Assemblée Nationale, where the government will no doubt attempt to push them through using Article 49.3 of the Constitution – a mechanism that allows a bill to pass without a vote, but allows for a vote of no confidence. First, the Social Security budget for 2025 on December 4, then the bill closing the 2024 budget on December 6 and the state budget for 2025, expected around December 20.
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