France is in big trouble again

Copyright © HT Digital Streams Limit all rights reserved. The Economist 4 min read 27 Aug 2025, 07:31 AM IST markets are already nervous, as France still has a game of political instability. (AP) Summary Why Macron’s Prime Minister calls a shock confidence voting over his guilt for the third time in a little over a year, France probably looks his prime minister. François Bayrou’s decision on August 25 to put his government’s survival on track with a confidence on September 8 was just as unexpected as it was risky. The Prime Minister of the Centrician Prime Minister runs a minority government in a dead -ended parliament divided into three blocks, two of which let him down. The 74-year-old Mr. Bayrou will have to acquire unusual political skills if he has to retain the work he insured less than nine months ago after his predecessor, Michel Barnier, has been overthrown. Markets are already nervous, as France still has a game of political instability. After the announcement of Mr. Bayrou, spread the yield on French ten-year effects compared to German bundles, the measure of the euro zone, from 0.69 to 0.73. The end of summer would always be a difficult political moment for Mr. Be bayrou. He compiled a budget for 2026, which includes the promise of € 44 billion ($ 51 billion) in savings to combat the 5.4% of GDP budget deficit in 2025 to a still high-high peak in 2026. This includes many unusual measures, especially the lifting of two of the Country 11 public holidays. The time this summer spent on the beach seems to harden the popular hostility to lose the extra days. Fully 84% told a poll in August that they were against the idea, of 73% in July. Rather than waiting to put his unpopular budget to parliament, Mr. However, Bayrou had a prominent strike. “Our country is in danger,” he declared in a serious and fighting to the afternoon of August 25. France’s public debt, at 114% of GDP, is only lower than that of Greece and Italy within the EU. “Dependence on debt has become chronic,” Mr. Bayrou continued. France will spend more on the service of debt this year (€ 66 billion) than to education or defense, he noted. Mr. Bayrou, who made a crusade against the country’s addiction to public spending in 2012 for the French presidency, called on parliament to take the risk of doing nothing seriously. The vote of the next month, he said, will not be the budget measures, but a simple question: Does Parliament agree that there is a ‘national emergency’ that the public finances must correct? Mr. Bayrou is right about the ominous state of French public finance. France has not balanced a budget since 1974. It has suffered debt, but still ensures any political gratitude in return. The prospect of another French government falling over the budget is alarming markets. Since August 12, France has been paying higher borrowing costs than Greece. In the early trading on August 26, French banks beat. Société Générale lost 6.31% of its value and gnp Paribas 5.75%. None of this convinced the opposition parties. Despite Mr. Bayrou’s efforts during the summer, including placing a series of worthy educational YouTube videos, there is still no political consensus on the seriousness of the moment. Jean-Luc Mélenchon, leader of the hard left, unforeseen France, Bayrou accused of dramatizing the situation. His party will vote against the government. Thus, Marine Le Pen’s hard right -wing national rally, which is the second largest opposition block in Parliament to the centers of Mr. Macron form. She called on the president to dissolve parliament and keep fresh elections, and it seems an option that Mr. Excluding Macron to Paris Match Magazine earlier this month. If he loses another government, he is constitutionally allowed to appoint another without returning to the ballot box. Mr. Bayrou is a messy old-timer with an attempt to maneuver himself to where he wants to be, but he is now running a dangerous line. To survive, he needs a majority of those present in parliament on September 8. But even the more moderate parties that supported him earlier this year, especially the socialists, suggest that they will not do it again. It’s hard to see how the numbers can pick up for him. By trying to call out the opposition parties on an urgent and simple question, Mr. Bayrou took a principled stance and a political risk. It is a pity reflection of France’s polarized politics that his government can now fall because opposition parties cannot even agree that uncontrolled debt and deficiencies are endangering the country. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #News Read Next Story