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FRANCE: Political Noise Surrounding Budget Unlikely To Dissipate Any Time Soon

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The French political landscape remains unstable amid the prospect of the gov't being brought down in a confidence vote. There has been uncertainty over whether PM Michel Barnier's minority gov't can muster enough support to get the budget across the line in the National Assembly. As we noted earlier this week (see 'FRANCE: Le Pen-Gov't Has Little Time To Improve Budget Bill', 0904GMT 25 Nov), Le Pen has threatened the far-right Rassemblement National (National Rally, RN) could vote down the budget if its demands are not incorporated. 

  • The gov't could use Art. 49.3 of the constitution to push the budget through without a vote, but this would immediately risk a confidence vote. If RN sides with the leftist NFP  the gov't will fall. The gov't can rely on ~210 deputies compared to over 360 for the opposition.
  • On 26 Nov Barnier warned of "quite a serious storm and serious turbulence in the financial markets" should the gov't fall. This morning RN deputy Jean-Philippe Tanguy accused Barnier of "crying wolf". Tanguy claimed that should the gov't collapse the RN would support the passage of stopgap measures to ensure tax collection etc. to avoid political and market chaos.
  • The Senate is set to vote on the budget 12 Dec, after which it returns to the National Assembly. The budget must be passed by 21 Dec, meaning the final showdown will come around 18-20 Dec. This means several more weeks of headlines regarding the prospect of the budget failing or gov't falling before it becomes clear whether the Barnier administration can thread the needle of passing a 2025 budget. 
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The French political landscape remains unstable amid the prospect of the gov't being brought down in a confidence vote. There has been uncertainty over whether PM Michel Barnier's minority gov't can muster enough support to get the budget across the line in the National Assembly. As we noted earlier this week (see 'FRANCE: Le Pen-Gov't Has Little Time To Improve Budget Bill', 0904GMT 25 Nov), Le Pen has threatened the far-right Rassemblement National (National Rally, RN) could vote down the budget if its demands are not incorporated. 

  • The gov't could use Art. 49.3 of the constitution to push the budget through without a vote, but this would immediately risk a confidence vote. If RN sides with the leftist NFP  the gov't will fall. The gov't can rely on ~210 deputies compared to over 360 for the opposition.
  • On 26 Nov Barnier warned of "quite a serious storm and serious turbulence in the financial markets" should the gov't fall. This morning RN deputy Jean-Philippe Tanguy accused Barnier of "crying wolf". Tanguy claimed that should the gov't collapse the RN would support the passage of stopgap measures to ensure tax collection etc. to avoid political and market chaos.
  • The Senate is set to vote on the budget 12 Dec, after which it returns to the National Assembly. The budget must be passed by 21 Dec, meaning the final showdown will come around 18-20 Dec. This means several more weeks of headlines regarding the prospect of the budget failing or gov't falling before it becomes clear whether the Barnier administration can thread the needle of passing a 2025 budget.