The vote was triggered by Prime Minister Michel Barnier pushing through a budget without parliamentary support, which angered both the right and left. 331 deputies voted against him, surpassing the 288 needed for the motion to pass.
France is now in a political unknown, with no government in place. Caretaker ministers will manage until a new Prime Minister is appointed, but policymaking and budget approval are on hold.
The crisis has widened the spread of borrowing costs between France and Germany to levels not seen since 2012. France's deficit is already under EU scrutiny, and the situation could exacerbate this issue.
Markets showed a shrug reaction as they had anticipated the outcome. The Euro weakened slightly, but overall, there were no major market moves immediately post-vote.
Key figures included Éric Coquerel from the far left and Marine Le Pen from the far right, both of whom strongly opposed the budget pushed by Michel Barnier.
Macron sought someone outside the day-to-day political fray and with strong negotiation skills, traits Barnier demonstrated during Brexit negotiations.
Le Pen could face a court decision in March 2024 that might bar her from future elections due to embezzlement allegations. This could influence her strategy to force an early presidential election.
An alliance with the Socialist Party, which gained seats in the last election, could be a possibility. However, convincing them to separate from the hard-left parties would be challenging.
Citizens are concerned about the cost of living and public services, but there is little hope that the current impasse will lead to addressing these issues effectively.
Here's Why host Stephen Carroll is in France this week covering the deepening political crisis that has gripped the country. We wanted to bring you a special episode of Bloomberg's Big Take podcast that he's been contributing to while there. We'll be back next week with a normal episode of the show.The Big Take: After No-Confidence Vote, France Faces Tumult and Uncertainty The government of French President Emmanuel Macron collapsed Wednesday after losing a no-confidence vote. The outcome brings the country one step closer to a far-right government — the one thing President Macron has sought to avoid at all costs. Bloomberg’s Stephen Carroll and Big Take co-host David Gura break down the current pressures on France’s government, what led to the vote and what we know about what comes next. Listen and follow The Big Take on Apple Podcasts), Spotify) or wherever you get your podcasts.
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