The French government once again stands on the brink of collapse, after Prime Minister Michel Barnier refused to bend to demands from right and left parties to make further concessions on the country’s budget plans. He now faces a no-confidence vote on Wednesday afternoon, which he is nearly certain to lose.
Meanwhile, the German government is already on track for a snap election early next year, with its own no-confidence vote set to take place in the next few weeks.
Even in the U.K., Prime Minister Kier Starmer and Finance Minister Rachel Reeves are under pressure just five months into the job, with disputes mainly centered around — you guessed it — the budget.
The interest rate on France’s benchmark 10-year government bond came close to rising above its Greek counterpart on Wednesday, as investors priced in the risk that parties at both ends of the political spectrum will bring down Prime Minister Michel Barnier’s government over his planned budget for next year.
By 1 p.m. in Paris, the yield on the French bond was at 3.03 percent, while that on its Greek counterpart was a mere one-hundredth of a point higher at 3.04 percent.
The French government has collapsed and the PM is expected to resign shortly. Then I presume will come new coalition negotiations, but it appears that no stable government will be likely formed. So there will probably be elections at some point (I’m not sure about the French laws regarding when elections can occur).
As a fluent French speaker and reader, living in NYC, where French media was readily available, my dad followed the news. He commented to me on the constant turmoil in the French government, during the 30s. As soon any any issue of any consequence came up, the ruling coalition of parties would fall apart.