Fréjus, France – 2023/05/03: Mayor François Bellew appears at the funeral of François Léotard. French politician and former Minister of Defense and Culture François Leotta died on April 25 at the age of 81. (Photo by Laurent Coust/SOPA Images/LightRocket via Getty Images)
Sopa Images | Light Rocket | Getty Images
French President Emmanuel Macron on Friday appointed François Bayrou as the new prime minister, as political uncertainty is expected to continue to weigh on the government after the overthrow of Michel Barnier’s government last week.
Berou becomes the country’s fourth prime minister this year after Barnier Resigned An unlikely alliance between left-wing and far-right opposition parties emerged on December 5 following a historic vote of no confidence.
Macron was expected to announce a successor a day after Barnier’s departure, but the decision was delayed until this week in a sign of the country’s political gridlock. The president also missed the 48-hour deadline he set for himself at a meeting of party leaders on Tuesday.
The delay reflects broader turmoil in French politics in recent months, with inconclusive legislative elections this summer and wider divisions over France’s huge deficit.
Macron calls for early elections in June and July to consolidate the power base of its centrist coalition in the National Assemblybut the power base has been seriously weakened.
Last week’s no-confidence vote – which came after weeks of wrangling over plans for a 2025 budget to raise taxes and cut public spending – between the left-wing New Popular Front (NFP) coalition and Marine Le Pen’s far-right The National Rally (RN) supports the motion against Barnier’s government. This was the first time since 1962 that the French government had been overthrown.
Barnier has been in the job for less than three months, replacing Gabriel Attal, who took office in January France’s youngest Prime Minister in modern history—and Elizabeth Bowen before him.
The incoming prime minister will now face many of the same pressures as his predecessor, with both the left and right expected to harass the new government over its 2025 budget agenda.
National rallies want concessions such as raising pensions, scrapping drug reimbursement schemes and reducing contributions to the EU budget. At the same time, the New Popular Front wants to increase public spending and raise taxes on excess profits and the wealthy.
As things stand, analysts believe that France’s main political groups are likely to agree on an interim budget that will simply extend the 2024 budget into next year. This will prevent France from “closing down” during the New Year period if it cannot meet its financial obligations.
However, such a move would delay the urgent need to address France’s fiscal problems, with a budget deficit expected to reach 6.1% of GDP in 2024 and expected to rise further if steps are not taken to rein in spending.
Investors currently cautious about France French benchmark 10-year bond yield It rose 3 basis points in early trading on Friday, rising to about 2.99% from before the news was announced. french CAC 40Meanwhile, it rose 0.5%.
—CNBC’s Holly Ellyatt contributed to this report.
This is a breaking news story. Please check back for updates.
