A week after the fall of the French government, President Emmanuel Macron has appointed François Bayrou as the country’s new prime minister. This appointment comes at a critical juncture as France faces political instability and mounting economic challenges.

Bayrou, 73, is the leader of the Mouvement Démocrate (Democratic Movement – MoDem) party, a centrist political group allied with Macron’s camp. He is also the mayor of Pau, a city in southern France, and is highly regarded by conservative factions. Known for his close ties with Macron, Bayrou is considered a trusted confidant of the president.

The announcement of Bayrou’s appointment followed a brief meeting with Macron at the Élysée Palace, which lasted less than two hours. The day before, the two had discussed the political situation over the phone. Macron’s entourage had earlier hinted that the new prime minister would be named on Friday morning.

Bayrou takes office amidst sharp political divisions in the National Assembly, where no party holds a majority. The assembly is currently split into three opposing blocs: The left-wing New Popular Front (NFP), Macron’s Centrist Coalition, and the right-wing National Rally (RN) and its allies.

The previous prime minister, Michel Barnier, was dismissed after failing to secure a quorum for the 2025 budget. Barnier’s tenure lasted only three months, highlighting the fragility of Macron’s government. The new head of government must now form an administration that can withstand potential votes of no confidence.

Bayrou’s appointment was met with mixed reactions. Conservatives expressed respect for Bayrou’s leadership and a willingness to cooperate. The Greens and Socialists criticized the decision, arguing that it signaled a continuation of existing policies rather than a fresh start.

Reports suggest that some conservatives and sections of the left have promised to tolerate the new government. However, if a broad coalition is not formed, a minority government would remain vulnerable to collapse.

Macron’s quick decision to appoint Bayrou is seen as a calculated risk. The president aims to stabilize the government and avert further political turmoil. Yet, opposition parties have escalated their criticism, with some even calling for Macron’s resignation.

France also faces mounting economic pressures, driven by excessive national debt. Observers suggest that fiscal discipline and strategic policymaking will be critical in navigating the ongoing challenges.

Sweden is preparing to implement new measures to address escalating energy prices, Swedish Energy Minister Ebba Busch announced on Thursday, 12 December. She attributed the energy crisis in Sweden and across the EU to Germany’s decision to phase out nuclear power.

Facing growing regional disparities in electricity costs and skyrocketing prices in the southern parts of the country, the Swedish government is considering additional support for households and businesses to alleviate mounting financial pressure.

“The government is open to supporting households and businesses if the need arises,” Prime Minister Ulf Kristersson stated, as citizens brace for higher energy bills this winter.

“I realize that nobody is happy when I say, ‘We wouldn’t have these problems if we hadn’t shut down half of our nuclear power.’ But it’s true, and it needs to be said,” Kristersson remarked. He pointed to the German Social Democrat-Greens coalition’s decision to shut down several nuclear reactors between 2019 and 2020, shifting toward renewable energy sources, as a key factor.

Public dissatisfaction has intensified in Sweden due to staggering electricity price inequalities. In an Aftonbladet article published on 11 December, energy expert Andreas Cervenka noted that electricity prices in southern Sweden are 18,000% higher than in central Sweden. For example, a 10-minute shower in southern Malmö costs over 31 SEK (2.65 euros), compared to 0.17 SEK (0.01 euros) in Sundsvall, located in central Sweden.

Busch criticized Germany’s nuclear phase-out, emphasizing its ripple effects across Europe. Speaking to Swedish broadcaster SVT, Busch stated: “I am very angry with the Germans. They made a decision for their country, and they have the right to do so. But this has had very serious consequences.”

Germany’s low wind energy production leads to increased reliance on Swedish electricity exports to fill supply gaps. This reduces availability for Swedish consumers, further driving up prices.

In addition, Sweden faces domestic structural challenges, including poor connectivity between northern Sweden—where hydropower surpluses are abundant—and southern Sweden, which has higher energy demands but limited local production. This issue is exacerbated by the Flow-Based Market Coupling system, an EU electricity market mechanism introduced in Sweden in October 2024. The system aims to optimize cross-border electricity flows but has significantly increased prices in southern Sweden.

The opposition Social Democrats argue that Sweden’s high electricity prices stem from flaws in the EU energy market itself. According to Fredrik Olovsson, the party’s industrial policy spokesperson, the Flow-Based Market Coupling model prioritizes broader European demand over national needs, further straining Swedish consumers.

“This really makes one angry,” Olovsson said. “A little over a month ago, the government had a chance to stop the model currently in place, which is contributing to these high prices. The industry raised widespread criticism, and we warned this could happen.”

As winter intensifies, pressure is mounting on Busch to renegotiate Sweden’s role in the EU energy market. Critics call for emergency relief for consumers while ensuring the long-term stability of the system. However, leaving the EU energy market is not currently on the Swedish government’s agenda. Instead, the government views the Flow-Based Market Coupling system as a partial solution to southern Sweden’s energy shortages.

“The EU-regulated flow-based capacity calculation model has many effects. One of them is that more electricity can be transported from northern to southern Sweden,” Busch explained, acknowledging the role of the EU energy market in influencing price increases. “This is necessary, especially since there is a serious shortage of electricity production in southern Sweden in relation to consumption and the grids,” she concluded.

European NATO members are considering increasing the alliance’s defense spending target from 2% to 3% of GDP at next year’s annual summit in June. The move coincides with Donald Trump’s return to the U.S. presidency, adding urgency to the discussions.

According to sources familiar with the preliminary talks, the proposal would place significant pressure on already strained national budgets, raising concerns across several European capitals. The current target of 2 %has been met by 23 of NATO’s 32 member states this year, compared to just six members achieving the benchmark in 2018. However, seven European countries, including Italy and Spain, still fall short of the 2% goal adopted a decade ago.

Trump’s insistence on increased European contributions to NATO and the growing recognition that current spending levels are insufficient to support Ukraine or deter Russia have pushed European leaders to reassess their defense commitments. Talks that began last week during a meeting of alliance foreign ministers suggest an interim target of 2.5% in the short term and 3% by 2030, according to insiders.

Mark Rutte, NATO’s Secretary General, emphasized the need for higher spending targets. While declining to disclose specific figures, Rutte stated, “When you look at the capability targets and the existing gaps, it’s very clear that 2% is not sufficient.” He expressed hope that the new goals could be formalized at the upcoming summit in the Netherlands, despite financial challenges faced by European nations.

The alliance’s non-U.S. members have collectively increased their defense budgets by approximately $100 billion over the past two years. Nevertheless, raising spending to 3% will be a significant challenge for many European economies, including the UK, Germany, France, Italy, and Spain.

The UK’s current defense expenditure stands at £60 billion, or 2.3% of GDP, with a commitment to increase this to 2.5%. Prime Minister Keir Starmer has indicated that a strategic defense review will outline a roadmap for achieving this target. However, defense analysts caution that even this level of spending may be inadequate for modernizing the UK military and meeting NATO’s updated requirements.

Italy, spending 1.49%, faces scrutiny under the EU’s Excessive Deficit Procedure for exceeding budgetary rules. Prime Minister Giorgia Meloni’s government aims to reach the current 2% target by 2028. However, Defence Minister Guido Crosetto warned that Trump’s return to office could increase pressure to exceed this target, potentially reaching 2.5% or even 3%.

Spain remains at the bottom of NATO’s defense spending rankings, allocating just 1.28% of GDP to defense. Despite this, Prime Minister Pedro Sánchez highlighted Spain’s contributions to NATO missions and its focus on allocating 20% of defense spending to research and development, exceeding alliance benchmarks in this area.

The United States—currently spending 3.4% of its GDP on defense—views increased European contributions as essential to maintaining the alliance’s readiness and burden-sharing. A German official commented, “A commitment to 3% would send a strong signal to the U.S. and Trump, showcasing Europe’s dedication to collective security.” Germany, which met its 2% target for the first time this year, faces similar challenges in increasing spending further.