The French government, led by Prime Minister Michel Barnier, is on the brink of collapse due to a budget dispute with parliamentary factions, particularly Marine Le Pen’s National Rally (RN) party.
RN leader Le Pen stated on Sunday that Prime Minister Barnier must make further concessions on the budget to avoid a no-confidence vote that could bring down his government. She gave Barnier a deadline of Monday, December 2, to meet the RN’s budget demands, warning that failure to do so could prompt her party to support a motion of censure.
In an interview with La Tribune, Le Pen said, “A vote against the government is not inevitable. All Barnier has to do is agree to negotiate.” However, she added that despite two weeks of negotiations, progress had been unsatisfactory.
Barnier had already abandoned a planned increase in electricity taxes last week, but the RN demands further changes, including increased pensions in line with inflation. The RN also seeks the cancellation of proposed cuts to drug reimbursements and is dissatisfied with the government’s fuel tax hikes.
Among other demands, the RN is pushing for a reduction in France’s contribution to the European Union budget.
The crisis could escalate if Barnier is forced to use his constitutional powers to push through the social security financing bill, which would likely trigger a motion of censure from the left-wing opposition.
Barnier’s survival depends on the RN’s abstention during the vote in the divided National Assembly. If the RN does not abstain, Barnier’s government and the budget bill could fall, potentially plunging France into a political crisis.
Budget Minister Laurent Saint-Martin emphasized on Sunday that the government respected the compromise reached with lawmakers on the social security bill. However, RN leader Jordan Bardella has made it clear that no further changes would be accepted.
Bardella accused the government of stubbornness and factionalism, which he believes are putting an end to negotiations and risking a no-confidence vote. He warned that the RN would launch a motion of censure if Barnier made no concessions by 14:00 today.
As the standoff continued, Saint-Martin and Finance Minister Antoine Armand cautioned that a no-confidence vote would have severe consequences for French taxpayers and pensioners. Armand told Le Journal du Dimanche that such a vote would force the government to pass an emergency law to ensure a budget could be drawn up at the start of the new year.
However, this law would only extend this year’s spending limits and tax provisions, meaning pensions would be cut and tax thresholds would increase for 17 million people, as they cannot be adjusted for inflation.
The growing uncertainty surrounding France’s budget and the future of its government has contributed to rising pressure on French debt and equities, with the risk premium on government bonds reaching its highest level in over 12 years last week.
