Fréjus, France – 2023/05/03: Mayor François Bellew appears at the funeral of François Léotard. French politician and former Minister of Defense and Culture François Leotta died on April 25 at the age of 81. (Photo by Laurent Coust/SOPA Images/LightRocket via Getty Images)
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French President Emmanuel Macron on Friday appointed François Bayrou as the new prime minister, as political uncertainty is expected to continue to weigh on the government after the overthrow of Michel Barnier’s government last week.
On December 5, a historic no-confidence vote led to Barnier’s resignation and an unlikely alliance between left-wing and far-right opposition parties, with centrist Beyrou becoming the country’s fourth prime minister this year.
The 73-year-old veteran politician has led France’s centre-right Democratic Movement since founding it in 2007 and is a long-time ally of Macron.
Macron was expected to announce a successor a day after Barnier’s departure, but the decision was delayed until this week in a sign of the country’s political gridlock. The president also missed the 48-hour deadline he set for himself at a meeting of party leaders on Tuesday.
The delay reflects broader turmoil in French politics in recent months, with inconclusive legislative elections this summer and wider divisions over France’s huge deficit.
Macron called for snap elections in June and July to solidify the power base of his centrist coalition in the National Assembly, but the result was a significantly weakened power base.
Last week’s no-confidence vote – which came after weeks of wrangling over plans for a 2025 budget to raise taxes and cut public spending – between the left-wing New Popular Front (NFP) coalition and Marine Le Pen’s far-right The National Rally (RN) supports the motion against Barnier’s government. This was the first time since 1962 that the French government had been overthrown.
Barnier has been in office for less than three months, succeeding Gabriel Attal – who in January became France’s youngest prime minister in modern history – and Elisabeth Borne .
The incoming prime minister will now face many of the same pressures as his predecessor, with both the left and right expected to harass the new government over its 2025 budget agenda.
Le Pen, in postal X urged Beyrou to listen to the opposition in order to develop a “reasonable and well-thought-out budget,” according to Google Translate. According to Reuters, national rally leader Jordan Bardella said in comments that the party’s policy “red lines” still exist.
Communist Party leader Fabien Roussel said social media According to Google Translate, Bellew’s appointment was a “bad idea” and questioned whether the incoming prime minister would continue with policies that “have failed and been punished.”
National rallies want concessions such as raising pensions, scrapping drug reimbursement schemes and reducing contributions to the EU budget. At the same time, the New Popular Front wants to increase public spending and raise taxes on excess profits and the wealthy.
As things stand, analysts believe that France’s main political groups are likely to agree on an interim budget that will simply extend the 2024 budget into next year. This will prevent France from being unable to meet its financial obligations and “shut down” the government during the New Year period.
However, such a move would delay the urgent need to address France’s fiscal problems, with a budget deficit expected to reach 6.1% of GDP in 2024 and expected to rise further if steps are not taken to rein in spending.
Investors are currently wary of France, with France’s benchmark 10-year government bond yield rising 3 basis points on Friday morning to around 2.99% ahead of the news. Meanwhile, France’s CAC 40 index rose 0.5%.
—CNBC’s Holly Ellyatt contributed to this report.
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