France's prime minister before removal: crisis of trust deepens

France's prime minister before removal: crisis of trust deepens

The French MPs will vote on a motion for no confidence on Wednesday, which is expected to overthrow the government of Prime Minister Michel Barnier. The country is in a deep political crisis and fights with a massive budget deficit.

political crisis and budget problems

This decision follows that Barnier tried to enforce part of the household of his cabinet for 2025 on Monday, which included measures to close the great deficit in the public finances of France and to bring the budgets back into harmony with the rules of the European Union by the end of the decade.

his Finance Act provides tax increases and expenses in the amount of 60 billion euros ($ 63 billion) with the aim of reducing the deficit to 5 % next year, according to the government's calculations. Some of the measures are extremely unpopular in the opposition parties, including the delay in adapting pension increases to inflation.

controversial and suspicion application

Barnier, who has only been in power since September and has a minority government supported by centrists and conservatives, tried to adopt parts of the budget through a controversial constitutional procedure that dealt with a vote in parliament. However, this step gave the MPs the opportunity to submit requests to no confidence against him. The left opposition, which is repeatedly swearing to bring its government to fall, took this opportunity.

The right -wing extremist National Association will now also take part in the vote on the fall of the government after the party could not reach concessions to the Barnier financial law.

political uncertainty and their effects

The vote on the vote of no confidence is only the youngest shock on the political roller coaster in France, where no individual party has been holding a majority in parliament since the new elections in July. If the application was accepted, the country would plunge into a political chaos. Since 1962 no government has been overthrown by a vote of no confidence, and Barnier would become the most shortest prime minister in the history of France. His cabinet would have to remain in a executive function until the appointment of a new tour of the French President Emmanuel Macron.

financial challenges and outlook

On Monday, the concerns about the effects of political vertebrae on the public finances of France caused the government's loan costs to rose from Greece. The public debt of France is approaching 111 % of the gross domestic product (GDP) - a level that has not been achieved since World War II, according to the loan agency S&P Global Ratings. This is partly due to the generous expenditure of the state to catch the economic effects of pandemic and the energy crisis triggered by Russia in Ukraine in February 2022.

The Kreditrating Agency expects the budget deficit of France to reach 6.2 % of GDP by the end of the year. This is more than twice the limits of 3 % specified by the EU rules and is one of the largest budget deficits among the euro countries.

"France remains a balanced, open, wealthy and diversified economy with a deep internal pool of private savings," said S&P on Friday. However, the agency added that the country's creditworthiness could be reduced if the government is "unable to reduce its great budget deficits" or if economic growth should remain behind the expectations of the agency over a longer period of time.

Political uncertainty already has an impact on the dominant service sector in France, reports Tariq Kamal Chaudhry, economist at the Hamburg Commercial Bank, on Wednesday. "The demand decreased in November, which a negative signal sends for early 2025," he commented on the latest survey results of the purchasing manager in the sector, which was published by S&P Global and Hamburg Commercial Bank.

The reporting of CNNS Olesya Dmitracova and Saskya Vandoorne contributed to the creation of this article.