SEBASTIEN BOZON | AFP | Getty Images
France’s government is hanging by a thread with the far-right National Rally party threatening to bring down Prime Minister Michel Barnier’s administration by the end of the year.
National Rally’s figurehead Marine Le Pen suggested Monday that talks with Barnier, aimed at extracting concessions on a tax-hiking 2025 French budget bill, had failed to produce changes that would allow her party to approve the government’s plans.
“We will see if today’s proposals are taken on board, but nothing is certain,” Le Pen said Monday, in comments reported by the Associated Press.
She was also reported to have reminded the prime minister of her party’s “red lines,” including its opposition to plans to raise electricity taxes and the delaying of increases to state pensions.
“We said what were the non-negotiable elements for us,” Le Pen said, AP added. “We are straight in our political approach. We defend the French people.”
Le Pen reportedly stated that if the government looks to force through the budget in December without the changes it wants, her National Rally party intends to support a confidence vote that the New Popular Front (NFP) alliance has already threatened.
Over the next few weeks, the budget bill is expected to be shuffled between the Senate and National Assembly, where a majority of lawmakers have already rejected the bill in both its original, and subsequently amended, form. The original budget has now gone to the Senate for review and debate before it faces a final vote on Dec. 12. It must be passed by Dec. 21.
Barnier has signaled he could use special constitutional powers to circumvent a parliamentary vote and get the budget passed by presidential decree.
That same rule — Article 49.3 of the French constitution — allows opponents to table a no-confidence motion, however, giving opposition parties on both the left and right the opportunity to bring down the government if they combine forces.
Carsten Nickel, deputy director of research at risk consultancy Teneo, said much now depends on Le Pen’s next steps.
“While the [leftwing[ NFP will certainly table such a motion, the crucial actor remains Le Pen,” he said in analysis last week.
“So far, her RN [National Rally] had been expected to abstain. Letting the government survive and the budget pass would allow Le Pen to present herself as more responsible than the NFP. However, Le Pen’s ongoing embezzlement trial threatens to unsettle this calculation.”
Le Pen and other key RN figures are currently on trial on charges of embezzling money from the European Parliament with fake jobs. Le Pen denies any wrongdoing but if found guilty, she could be jailed and banned from French politics for five years, putting a halt on her presidential ambitions for the 2027 elections.
The trial adds a further element of uncertainty as to whether National Rally will follow through on its threat to topple Barnier’s government. Doing so would certainly be a distraction for Le Pen, according to David Roche at Quantum Strategy, but it’s uncertain whether she will want to be responsible for unleashing more political chaos and economic uncertainty for European Union’s second-largest economy.
Crisis brewing
France’s political establishment has been in disarray since inconclusive parliamentary elections in the summer that saw both the rightwing RN and leftwing NFP win respective rounds of the vote.
Both blocs were sidelined after the election, however, with French President Emmanuel Macron putting right-leaning conservative Michel Barnier in charge of a minority government, much to the chagrin of the left.
The move also meant that Barnier’s government, made up of Macron’s centrists and lawmakers from Barnier’s Les Républicains party, has been reliant on National Rally for support and its survival, leaving it vulnerable to the whims of its leaders, Jordan Bardella and Marine Le Pen.
Barnier’s government already survived a vote of no confidence in October that was brought by outraged NFP lawmakers, led by Jean-Luc Mélenchon, who feel they were robbed of their election win. National Rally abstained from that vote, effectively saving the fledgling government.
But the 2025 budget bill presented on Oct. 10 has brought divisions to the fore, with far-right opposition to the government’s proposals of 60 billion euros ($62.85 billion) in savings, with 40 billion euros coming from spending cuts and the remaining 20 billion euros through tax increases.
The aim is to reduce the country’s yawning deficit to around 5% of GDP in 2025, down from an expected 6.1% in 2024 — over twice the level permitted by the European Commission.
Countries within the EU are obliged to keep their budget deficits within 3% of gross domestic product and their public debt within 60% of GDP. France’s budget deficit stood at 5.5% of GDP in 2023, and public debt topped 110%. Budget Minister Laurent Saint-Martin warned last month that the deficit could widen to 7% in 2025 if drastic measures were not taken.
David Roche at Quantum Strategy said he believed the French government would “probably fall” in December but noted that no legislative elections can be held before June 2025, by law (that is, 12 months after the last vote called by Macron).
“So Macron can leave Barnier in place at the head of a paralysed caretaker government (without a budget!) or appoint someone like the Governor of the Bank of France to head a totally passive government performing minimalist tasks until June” before “more elections and more instability,” Roche said in emailed comments Tuesday.
If the government does fall, Roche cautioned that “any idea that France will cut its deficit and debt is out of the window.”
He believed that currently economic data out of France underestimates the fiscal challenge, estimating that the current budget deficit is running at 6.5% and public debt to GDP stands at 112%.