December 25, 2024

On November 27, 2024, Marine Le Pen, a member of the French far-right party National Rally (RN), was tried in a Paris court for alleged misappropriation of European public funds.

Alain Chaucard | AFP | Getty Images

The French government is in jeopardy with the far-right National Rally party, which threatens to overthrow Prime Minister Michel Barnier’s government by the end of the year.

National rally figurehead Marine Le Pen said on Monday that talks with Barnier aimed at extracting concessions on France’s 2025 tax-hike budget bill had failed to produce changes that would have allowed her party to approve the government’s plans.

“We will see if today’s proposals are adopted, but nothing is certain,” Le Pen said in comments reported by The Associated Press on Monday.

She also reportedly reminded the Prime Minister of the party’s “red lines”, including opposing plans to increase electricity taxes and delaying increases to the state pension.

“We said what are the non-negotiables for us,” Le Pen said, the AP added. “Our political approach is straightforward. We defend the French people.”

Le Pen reportedly said that if the government wanted to force through the budget in December without making the changes it wanted, Her National Rally party intends to support a confidence vote The New Popular Front (NFP) alliance has issued threats.

Over the next few weeks, Budget bill expected to be reshuffled between Senate and Congressa majority of lawmakers have rejected the bill in its original form and subsequent revised forms. The initial budget is now before the Senate for review and debate before a final vote on December 12. Must pass by December 21st.

Barnier said he could use special constitutional powers to circumvent parliamentary votes and pass the budget through a presidential decree.

However, the same rules – Article 49.3 of the French constitution – allow opponents to file a motion of no confidence, giving left- and right-wing opposition parties a chance to overthrow the government if they unite.

France unveils 2025 budget

Carsten Nickel, deputy director of research at risk consultancy Teneo, said much now depends on Le Pen’s next step.

“While the (left-wing) NFP will certainly put forward such a motion, the key figure remains Le Pen,” he said in an analysis last week.

“So far, her RN (National Rally) is expected to abstain from the vote. Letting the government survive and pass the budget would allow Le Pen to project a more responsible image than the NFP. However, Le Pen’s ongoing corruption trial may would mess up this calculation.

Le Pen and other prominent RN figures are currently on trial Accused of embezzling European Parliament funds through false employment. Le Pen denies any wrongdoing but if found guilty She could be jailed and banned from French politics for five years, Preventing her presidential ambitions from running in the 2027 elections.

The trial adds further uncertainty to whether the National Assembly will follow through on its threat to overthrow Barnier’s government. David Roach of Quantum Strategies said doing so would certainly distract from Le Pen, but was unsure whether she would be willing to take responsibility for bringing more political chaos and economic uncertainty to the EU’s second-largest economy.

Crisis brewing

Economists say France hopes to avoid a hit to economic growth by raising taxes and cutting spending

Quantum Strategy’s David Roche said he believed the French government “could fall in December” but noted that by law no legislation could be held until June 2025, 12 months after Macron’s last vote election.

“Macron can therefore let Barnier continue to lead a paralyzed caretaker government (without a budget!), or appoint someone like the governor of the Bank of France to lead a completely passive government with minimal tasks until June ” and then “more elections and more instability,” Roche said in emailed comments on Tuesday.

Roach warned that if the government did fall, “any idea that France will reduce its deficit and debt will be ruled out.”

He believes that France’s current economic data underestimates its fiscal challenges, estimating that the current budget deficit is 6.5% and the public debt-to-GDP ratio is 112%.

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