France: PM Barnier Warns of 'Serious Storm' as Budget Dispute Threatens Government Collapse

Facts

• French Prime Minister Michel Barnier claimed in an interview with TF1 on Tuesday that the country could experience a 'serious storm' if the parliament rejects the proposed 2025 budget, which includes €40B (US$42B) in spending cuts and €20B ($21B) in tax increases.^[1][2]
• His minority government, which holds 210 seats out of 577 in the lower house of parliament, could use Article 49.3 of the Constitution to pass the budget without a vote. However, this tool would trigger a vote of no confidence within 24 hours that could both topple the government and repeal the bill.^[1][3]
• Both Marine Le Pen of the right-wing National Rally (RN) and Mathilde Panot of the left-wing France Unbowed (LFI) met with Barnier on Monday amid speculation that their parties could join forces to overthrow the government in a no-confidence vote.^[4][5]
• After her meeting with Barnier, Le Pen said that she would vote against the government in a confidence vote if budget concessions were not made. Two days later, National Rally's Jean-Philippe Tanguy said that his party is still debating the budget and a possible no-confidence motion.^[6][7]
• France's budget deficit for 2024 sits at 6.1% of gross domestic product (GDP), while the gap between French and German 10-year bond rates has now reached its highest level since 2012. It's projected that Barnier's budget would reduce the deficit to 4% in 2025, before reaching the 3% EU limit in 2030.^[8][9]
• Constitutional rules prevent Pres. Emmanuel Macron from calling new elections until June 2025, and the budget must be approved by Dec. 21 and enacted into law by Dec. 31.^[5]

Sources: ^[1]Euronews, ^[2]POLITICO, ^[3]Conseil, ^[4]France 24, ^[5]The Local, ^[6]BNN Bloomberg, ^[7]Lemonde, ^[8]Le Monde.fr and ^[9]Reuters.

Narratives

• Left narrative, as provided by Révolution Permanente and World Socialist Web Site. French capitalism and neoliberalism has failed and is collapsing in front of our very eyes. After years of crippling inflation thanks to decades of pro-business, anti-worker globalization, the establishment's attempt to pass an austerity budget is a disgrace to the French people. It's time to throw out the status quo: Power must be devolved to local assemblies, workers' rights must be protected, public services must be properly funded, and the war economy must be dismantled.
• Right narrative, as provided by Boulevard Voltaire and Europeanconservative. If Barnier wishes to remain prime minister, he must listen to the demands of Le Pen and her party. Tax rises for working people cannot be accepted while migrants continue to receive free healthcare and the EU continues to rob the country of billions of euros. France's centrist economic ideology has inflicted pain and debt on the French people for decades – changes must be made or the National Rally cannot in good conscience defend Barnier any longer.
• Pro-establishment narrative, as provided by Bruegel and EPC. In tough conditions, Barnier's budget is a successful attempt to reduce the French deficit that, despite low odds of passing in parliament, would likely hold the support of both the EU and the markets. While the French government continues to walk a tightrope between two opposing ideologies both in staunch opposition to Barnier's proposals, Pres. Macron must do his best to remain a figure of strength and stability in what is an increasingly precarious era for Europe.

Predictions