French Government Falls: No-Confidence Vote Outcome and Implications

The French government collapses after a no-confidence vote, prompting uncertainty about future leadership and budget management.

### French Government Falls: No-Confidence Vote Leads to Political Uncertainty
* 🇫🇷 The French government has collapsed following a no-confidence vote in parliament, which passed with **331 votes**, exceeding the required **288**.
* 🗳 Despite hopes from Michel Barnier to sway the Socialist Party, no defections occurred, indicating a **solid opposition front** from left-wing alliances and the far-right National Rally.
* 📉 The outcome aligns with expectations, but it raises questions about **President Emmanuel Macron's next steps** after his return from Saudi Arabia.
* 🤔 Macron has dismissed resignation as an option, emphasizing that his term **lasts until 2027**, yet the political vacuum complicates upcoming challenges, particularly regarding the **budget**.
* 👥 There is uncertainty about potential candidates for the new prime minister, as **no clear support exists for any individual**, and the parliamentary math remains **unchanged**.
* 💬 Lawmaker Mathilde Panot declared the fall of Barnier's government a **historic moment**, highlighting the **difficulties ahead for the French budget**.
* 📅 With the current budget plan in jeopardy, the government may face a **month-to-month operation** starting January, increasing pressure on **borrowing costs and welfare provisions**.
* 🏛 A motion will be required in Parliament to implement temporary measures to keep the state functioning, with **little opposition anticipated** as no politician wants to face the **fallout of halted welfare payments**.

We're getting a result right now.
The French government falls after a no-confidence vote in parliament.
The no-confidence motion passed with 331 votes.
288 were needed. Not too surprising given how closely you followed this, but what's your immediate

reaction?
I mean, look, it means there weren't any defections.
Michel Barnier called for responsibility. He doesn't seem to have won over any of the MPs. He was hoping it would particularly
target the centre-left party, the

Socialist Party, who have been in
government in France many times in recent history.
The question was whether some of those parliamentarians might be willing to
abstain from this vote to try and save the government.
He doesn't seem to have convinced them

with this message.
That's the number in and around what we expected, because it's basically: if you
add together the left-wing alliance, Nupes, Le Pen's far-right National Rally,
those parties put together gave us that total of around 330.
So it looks like they didn't manage to

convince anyone to cross the line.
It's a result that's pretty much in line with expectations, but now opens up
the question of what happens next. What will Emmanuel Macron do?
He's just landed back in France in the past few minutes from a visit to Saudi
Arabia where he was trying to brush off

a lot of these press questions at
home and continue with international affairs to little avail, as everyone
just wants to ask him what he plans to do after this vote.
He had been asked on many occasions whether he might resign, and he
says that's not an issue.

It's not even in question that he would do that. Of course, his term runs until 2027. So we now set ourselves up for a timeline where the French president can take as long as he likes to appoint a new government. We don't think he's going to leave it

that long, but it does plunge us into a sort of political vacuum now. We'll have a caretaker government to keep current affairs running, but it's going to make those big challenges, like dealing with the budget, even more difficult. Stephen, do we have a good idea of who

would likely be the next prime minister and what that new government would look like?

We don't. There are a couple of names that have been floated around, but it's not a specific list of people that have been floated.

You could imagine that Emmanuel Macron would try and pick from, if not his own political family, those who've already said that they would ally with him. There had been a question before Michel Barnier was picked as to whether he

might be able to pick a politician from the Socialist Party, that center-left party, and thus bring them into this center alliance that he was trying to create. But they couldn't agree between the left-wing parties on the same candidate that Emmanuel Macron wanted; that was bound.

in the realm of speculation. There's no rallied support around anyone. There is no obvious candidate for who would take over because the challenge facing the person who takes on that role is that they have the same parliamentary math to deal with. Michel Barnier was dealt a very difficult hand.

He didn't have a majority in Parliament. He did his best to try and build a way of working. He always said that he was leaving it to Parliament to be able to legislate and negotiate on important matters. That's failed. You have to ask who would be brave

enough to step into those shoes because it's a pretty nasty hand of cards, to be honest. That's exactly where I want to go. We're getting some commentary from France Unbowed lawmaker Mathilde Panot, who says that, quote, 'Finally, the Barnier government has fallen along with

its violent budget.' Today is a historic day. What does a budget look like in France after this process? Well, look, we go into this situation where we're going to be going month to month from January. There is very little hope that

even if a government was formed tomorrow, that they would be able to resuscitate this current budget plan and actually get anything in place by the end of the year. So either way, when it comes to the end, the 31st of December, we're rolling into this with those minimum service French

states that are going to be in place from January of next year. And that's going to bring back in those questions around tax rises for a lot of households who are paying income tax, those rises for pensions as well. And there were specific things like extra financial aid for farmers, which

Now, it won't be paid out because that won't go into the budget bill. So the next immediate step is that there will be a motion that will need to be passed in Parliament to, I suppose, activate these temporary measures to keep the state running, keep the lights on, if you will.

There's not expected to be any major opposition to that because no French politician wants to be responsible for, you know, no welfare payments being paid early next year. So there's not an expectation that we will have anything but this month-to-month situation operating from January

with a larger budget deficit and with the pressure that's going to push on France's borrowing costs and international markets as well.

French Government Falls After No-Confidence Vote

The latest financial news and market analysis, direct from Bloomberg TV.

Visit our other YouTube channels:

Bloomberg Originals: https://www.youtube.com/user/Bloomberg
Bloomberg Quicktake: https://www.youtube.com/@BloombergQuicktakeNow

For more coverage on news, markets and more: http://www.bloomberg.com

Bloomberg Television

No-confidence motion passed with 331 votes (288 needed).

No defections from expected voting blocs.

Michel Barnier's attempt to sway Socialist Party MPs failed.

Result aligns with predictions based on left-wing and far-right votes.

Macron's return to France from Saudi Arabia amidst press inquiries.

Macron denies any intention to resign; his term lasts until 2027.

A caretaker government will manage current affairs, creating challenges.

Uncertainty Regarding the Next Prime Minister

No clear candidate for the next prime minister.

Speculation about potential candidates from Macron's alliance or Socialist Party.

The next prime minister will face the same parliamentary challenges as Barnier.

Mathilde Panot's comment on the fallen government and its budget.

Month-to-month budget management from January onward.

Uncertainty about the budget affecting tax rises, pensions, and aid for farmers.

A parliamentary motion will activate temporary measures to keep the state running.

Month-to-month operation expected from January, impacting budget deficit and borrowing costs.