France is on the political brink — again

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Barring a last-minute U-turn by the far-right leader Marine Le Pen or other opposition, a no-confidence vote against Prime Minister Michel Barnier seems set to plunge France into the unknown as early as Wednesday. If it does pass, it will be the first time a government has been toppled in this way since Georges Pompidou’s in 1962. The EU’s second-largest economy will be left struggling to form a workable administration and pass an emergency budget by the year-end, the reputation of its political class further dented. It is hard to think of a worse moment: a month after the implosion of Olaf Scholz’s coalition in Germany, and weeks before Donald Trump’s return to the White House.

The potential chaos underlines the folly of the snap elections called by President Emmanuel Macron in July that produced a fractured and fractious parliament. His advisers continue to justify the decision by saying that, without it, France was heading for a showdown over a cost-cutting budget needed to reduce a ballooning deficit forecast at over 6 per cent this year. That showdown has come to pass nonetheless.

For now, despite Barnier’s warnings last week of a “big storm” in the markets, this is a political not a financial crisis. Though French borrowing costs have hit a 12-year high against Germany’s, there is little sign of Eurozone contagion. The risk to French bonds, however, will persist if the political instability becomes protracted.

The imbroglio in part reflects errors by Barnier, too. The serious-minded ministerial veteran and former EU commissioner proposed an overly ambitious budget aiming to reduce the deficit to 5 per cent by the end of 2025, even more than Brussels was demanding. He may have underestimated the complexity of navigating a parliament transformed since he was last politically active in France. It is now composed of radical left and rightwing blocs and a squeezed centre.

Even the government’s own supporters have been immersed in political infighting, with 2027 presidential ambitions in mind. But Barnier refused to negotiate with Le Pen’s Rassemblement National until too late, then had to offer costly concessions, which still proved insufficient.

His calculation appeared to be that Le Pen would ultimately flinch from bringing down the government, after years of trying to “normalise” the image of her party as a responsible actor. If she presses ahead with her apparent decision to tilt back to being a disrupter, and side with a leftwing bloc she loathes in a censure vote, this will be a hefty gamble. It might yet backfire, especially among the more moderate voters RN needs to boost its chances of winning political power. Though Le Pen says Barnier’s budget will harm the less well-off, rolling over the 2024 budget and its tax bands will increase taxes on thousands of households, and pull thousands more into paying income tax for the first time.

With Le Pen facing a judgment on March 31 in a corruption trial that could lead to a ban from running for president in 2027, she may have chosen to throw caution to the wind — perhaps even in hope of unseating Macron and prompting an early presidential poll.

France’s president will surely try to hold firm against demands to stand down. If Barnier falls, Macron’s priority must be to find a new premier who can roll over the budget, and potentially hold on until parliamentary elections can be held next July. They would be unlikely, though, to return an assembly much different from today’s. Macron will attempt to present himself as a pillar of stability. But he seems increasingly buffeted by events, rather than in control of them — just when Europe most needs strong and concerted leadership in its major capitals.