French President Macron Looks For A New PM Following Bayrou’s Ouster In Vote
While Macron doesn’t lack for people who might accept the role, selecting someone who can find common ground among the groups is far from obvious.
French President Emmanuel Macron will appoint a new prime minister within days, after the current premier lost a confidence vote in the lower house of parliament.
Prime Minister Francois Bayrou is formally presenting his resignation to Macron on Tuesday. Whoever Macron picks as his successor will need to assemble a government and then find a way to pass a budget in a starkly splintered National Assembly, an exercise that’s toppled the last two prime ministers.
While Macron doesn’t lack for people who might accept the role, selecting someone who can find common ground among the groups is far from obvious.
“Which party can one even recruit from?” Kathryn Kleppinger, George Washington University professor of French studies said in an interview on Bloomberg Television. “I fear we’re going to be dealing with more of the same.”
The new premier will be France’s fifth in less than two years, a reflection of the irreconcilable blocs in the country’s fractured political landscape.
The Socialists were quick to propose their services following the vote. “I think it’s time for the left to again govern this country and break with the policies that have been implemented for the past eight years,” party leader Olivier Faure said on TF1 television, referring to Macron’s time in office.
At the same time, on France 2 television, outgoing interior minister Bruno Retailleau, who also heads the center-right Republicans, said he wouldn’t take part in a government led by a Socialist prime minister. Speaking on the same channel, far-left firebrand Jean-Luc Melenchon also said he would not support a government led by Faure.
The current upheaval comes a year after Macron called an ill-fated snap election to consolidate centrist power in the face of a rising far right. Since then, France’s CAC 40 Index — home of bellwethers such as LVMH Moet Hennessy Louis Vuitton SE, Airbus SE and L’Oreal SA — has fallen 3.3%, compared with a 5.4% gain for the Stoxx Europe 600 Index and a 25% rise in Germany’s DAX Index, excluding dividends.
The spread between the yield of France’s 10-year government bond and Germany’s bund — a key measure of risk — was 76 basis points late Monday, down from 82 basis points in late August, shortly after Bayrou called the confidence vote.
“Whichever outcome of the current political crisis, the probability of a significant public finances reform will remain low,” Michael Nizard, head of multi-asset and overlay at Edmond de Rothschild Asset Management, wrote in emailed comments. “So much so that financial markets themselves seem resigned and might settle for a scenario where the budget deficit does not deteriorate further.”
Bayrou had proposed €44 billion of spending cuts and tax hikes that would narrow France’s 2026 deficit to 4.6% of economic output from an expected 5.4% this year. He also floated an unpopular proposal to cut two public holidays as a way to reduce costs in Europe’s second-largest economy.
France’s deficit is the widest in the euro area with debt rising by €5,000 ($5,840) a second, according to Bayrou. The cost to service its obligations is set to hit €75 billion next year, he has also said.
Marine Le Pen’s far-right National Rally as well as the leftist France Unbowed have both called for new legislative elections, something that Macron appears to have ruled out with his statement on naming a new prime minister. Some have also called for Macron’s resignation, but he has steadfastly said he will remain through the end of his term in 2027.
“If there’s no dissolution, we will continue in a constructive but uncompromising spirit to promote the ideas that our voters have asked us to defend,” Le Pen said on Monday in a speech before the confidence vote. “But I say this solemnly: do not expect the National Rally to follow you in your fiscal and migratory craziness, in your petty ideological biases that prevent you from seeing the reality of the country.”
A union strike planned for Sept. 18 is putting pressure on Macron to have a new government in place by then. A separate, less centralized, protest is planned on Sept. 10.
On Friday, Fitch Ratings is scheduled to update its assessment of France’s creditworthiness.
The French president is solely responsible for picking a new premier, and there is no constitutional time limit for a decision. It took Macron two months to appoint the previous premier, Michel Barnier, who lasted only 90 days. Macron took more than a week to name Bayrou after Barnier was ousted. Once appointed, the premier must propose a cabinet to be signed off by Macron.
