France nears political collapse as PM pushes austerity policies

French Prime Minister Michel Barnier announced this afternoon that a controversial social security budget will be pushed through by presidential decree – a move which is set to trigger a no-confidence vote that will likely topple his government. France’s hard-right National Rally party said it would vote to oust Mr Barnier’s government after the prime minister used an executive tool to push through a social security budget bill without parliamentary approval. ‘We will vote no confidence,’ the RN said on X. ‘We are tabling a motion of censure and we will vote for the censure of the government,’ confirmed Marine Le Pen, the party’s leader in parliament. ‘The French have had enough,’ she told reporters. ‘Maybe they thought with Michel Barnier things would get better, but they were even worse.’

The RN is the largest party in parliament. Left wing MPs are also expected to back the motion, which could be held as early as Wednesday and if successful would bring down the minority government after only three months in office. No French government has been forced out by such a vote since 1962 and it would make Mr Barnier the shortest-serving prime minister in the history of the Fifth Republic. Mr Barnier’s budget bill was designed to rein in France’s spiraling public deficit through 60 billion euros ($63 billion) in tax hikes and spending cuts, but was slammed by Ms Le Pen and others as being ‘deeply unfair’ to the French people. Explaining why he pushed through the policies without a parliamentary vote, Mr Barnier told the National Assembly in a dramatic speech this afternoon: ‘The situation is serious, the immediate daily lives of the French are at stake.’ Ms Le Pen, the RN’s designated presidential candidate, previously said that Mr Barnier’s €40 billion (£33billion) in spending cuts and €20billion (£16bn) in tax hikes would be a disaster.

In turn, Mr Barnier, the former EU Brexit negotiator, described the measures as essential if France is to control its deficit, which is projected to hit 6.1 percent this year. In a dramatic speech to the National Assembly this afternoon, Mr Barnier said he had ‘reached the end of dialogue’ with opposition parties, and that ‘at this moment of truth’, ‘it is time to act to implement Article 49.3’ of the Fifth Republic Constitution. Designed to strengthen presidential government, the measure allows any serving head of state to effectively ignore parliament. The Article has frequently been used by President Emmanuel Macron ‘s prime ministers to get difficult legislation through since he came to power in 2017. In this case, they were used because of fears that the social security measures had no hope of being voted through the Assembly.

RN leader Jordan Bardella said on Monday that Mr Barnier’s austerity measures would cause suffering across the whole country. ‘The budget presented by the government is a budget of punishment that will weaken the purchasing power of our compatriots,’ he said. Responding to Mr Barnier’s decision today, Mr Bardella wrote on X: ‘Last June, the French wanted to turn the page on Emmanuel Macron. ‘There is no way out for a government that reconnects with the thread of Macronism, which refuses to take into account the social emergency at the end of the month and which ignores the need to relaunch growth. The National Rally will vote for censure.’ The left-wing New Popular Front alliance won the most seats in the National Assembly during a snap election called by President Macron in June, but has not been allowed to play any part in government since.

La France Insoumise (LFI) MP Clémence Guetté posted on X this afternoon: ‘It’s done. Michel Barnier triggers Article 49.3 on the Social Security budget. ‘We are tabling a motion of censure. This government will fall in two days. But this is only one step: Emmanuel Macron’s resignation is the only way out of the political crisis.’ ‘We no longer accept this authoritarianism of Emmanuel Macron who, each time, pushes through with force’, LFI President Mathilde Panot reiterated. ‘Faced with this umpteenth denial of democracy, we will censure the government. Michel Barnier will go down in history as the man with the shortest mandate. ‘We are living in political chaos because of Michel Barnier’s government and Emmanuel Macron’s presidency’, Panot told reporters at the National Assembly.

The left-wing alliance, which her party is a member of, swore to back a no-confidence motion against Mr Barnier, meaning he relied on the support of the hard-right RN. This influential kingmaker position saw the party put forward a list of demands, including a reduction in France’s contribution to the European Union’s budget. ‘We have got four red lines, which are real red lines,’ Ms Le Pen told Le Monde last week, saying Mr Barnier had ‘until Monday to comply.’ Mr Barnier gave way on one of the RN demands – scrapping a planned rise in tax on electricity – but the last-minute budget concession but was not enough to win support from the RN. This led to some commentators predicting the kind of financial disaster that befell Greece when it came close to bankruptcy in the aftermath of the 2008 international debt crisis.

A no-confidence vote will not take place for at least 48 hours, giving Mr Barnier time to make further concessions to his opponents before a separate vote on the main budget due later in the month. The RN’s own position is complicated by a court case against Ms Le Pen and other top figures in the RN over the alleged embezzlement of millions of pounds worth of cash from the EU. If the judgment, due in March, goes against the RN, Le Pen is facing prison, and could be barred from standing for political office in the next five years. This would rule her out of the 2027 presidential election. Mr Barnier, who is 73 and not an elected MP, was brought out of retirement by President Macron in September to try and bring some stability to the French government.

As the political crisis worsened today, investors punished stocks and bonds and sold the euro, with French borrowing costs rising above those of Greece for the first time on record. The RN, on whose tacit support the fragile coalition government relies, had given Barnier until today to yield to its demands – including on pension hikes – or face it backing a no-confidence motion that would lead to the government’s collapse. ‘The RN will trigger the no-confidence vote mechanism unless there is a last-minute miracle if Michel Barnier revises his copy before 3pm (1400 GMT),’ Bardella told RTL radio, referring to the time at which parliament is set to vote on the social security financing bill. If he sees he does not have enough support to get that bill voted, Barnier can choose to use aggressive constitutional powers to force it through, which would inevitably trigger a no-confidence motion from the left.

Barnier already dropped a planned electricity tax increase last week, which the RN called a victory, but Ms Le Pen’s party also wants him to raise pensions in line with inflation, whereas he had aimed to increase some of them less than inflation to save money. The RN is calling for planned cuts to medication reimbursements to be scrapped and is unhappy the government may raise the tax on gas. It also wants a reduction in France’s contribution to the European Union’s budget. France is facing a difficult financial and economic situation due to the risk its budget may be blocked in parliament, Pierre Moscovici, head of France’s public audit office, said. ‘Our financial situation today is dangerous,’ Moscovici told France 2 television.

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