French National Assembly Votes No Confidence in Government over 'Parliament Bypass'... Government Shutdown Possible (Summary)

French National Assembly Passes No-Confidence Motion Against Barnier Government
Prime Minister Barnier Must Submit Resignation
Possibility of Passing Next Year's Austerity Budget Diminishes
President Macron's Leadership Put to the Test
French Political Scene Likely to Be Swept by Turmoil
Dark Clouds Gather Over Financial Markets

On the 4th (local time), the French National Assembly passed a vote of no confidence against the Michel Barnier government. This was due to the government choosing the 'parliament passing' card to handle next year's austerity budget. As a result, the Barnier government, which was launched last September, is on the verge of dissolution after about two and a half months. It will be recorded as the shortest-lived government in the history of the French Fifth Republic and the first case since the Georges Pompidou government in 1962 where the French government collapsed due to a no-confidence vote in the National Assembly.

Vote of No Confidence Passed... Quorum Surpasses 288 Seats

Prime Minister Barnier EPA Yonhap News

According to major foreign media, the French National Assembly voted on the no-confidence motion against the Barnier government, proposed by the left-wing coalition, in the evening, passing it with 331 votes in favor and 243 against. The total number of members in the National Assembly was 574 (3 seats vacant), and the quorum for passing the no-confidence motion was 288 seats. The left-wing coalition New Popular Front (NFP), which proposed the no-confidence motion, as well as the far-right National Rally (RN) and its allied forces, who also proposed their own no-confidence motion, all voted in favor.

Accordingly, Prime Minister Barnier must submit the government's resignation to President Emmanuel Macron. Receiving a no-confidence vote from the National Assembly just 90 days after taking office, Barnier has earned the dishonor of being the shortest-serving prime minister in the history of the French Fifth Republic. Mathilde Panot, the parliamentary leader of the far-left party La France Insoumise (LFI), which led the collapse of the Barnier government, emphasized, "Finally, the Barnier government has fallen along with its violent budget," calling today "a historic day."

The Barnier government and the opposition have been in conflict over the 2025 budget. The Barnier government submitted next year's austerity budget to the National Assembly, focusing on reducing government spending and raising taxes to cut the national fiscal deficit. The opposition has opposed the government budget, citing reasons such as cuts to social welfare, weakening consumer sentiment, and increased burdens on businesses. Unable to narrow the differences, Prime Minister Barnier announced on the 2nd that he would invoke Article 49.3 of the Constitution, which allows the government to adopt social security finance legislation without a vote in the National Assembly under government responsibility. This was the direct cause of the no-confidence motion being proposed and voted on that day.

With the collapse of the Barnier government, the passage of next year's budget has become uncertain. If the 2025 budget is not passed by the end of the year, the worst-case scenario could be a 'shutdown' of public administration, the first in the history of the French Fifth Republic. Currently, extending this year's budget into next year seems likely, but this means fiscal austerity measures cannot be implemented. France, where this year's fiscal deficit is expected to be 6.1% of GDP, is under pressure from the European Union (EU) to reduce fiscal spending.

President Macron's Leadership Inevitably Damaged

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With this historic government collapse, President Macron faces another political crisis. The far-left party is demanding not only the Barnier government's resignation but also President Macron's. However, during a visit to Saudi Arabia the previous day, President Macron dismissed the possibility of resignation, stating in response to media questions, "I will carry out the presidency until the last moment."

President Macron is expected to promptly appoint a new successor prime minister. It is reported that President Macron hopes to appoint the new prime minister before the reopening ceremony of Notre-Dame Cathedral scheduled for the 7th. Local French media see it as likely that President Macron will select the prime minister from the centrist coalition.

However, intense party rivalry over the prime minister appointment is expected, and the French political scene is anticipated to plunge into a stormy whirlpool. The French media Le Monde likened President Macron's task of forming a new government amid parliamentary paralysis to "looking for a five-legged sheep."

Moreover, even if a new cabinet is formed with difficulty, widespread reforms are unlikely. This is because no party secured a majority of seats in the parliament after the early general election. Consequently, calls for dissolving the National Assembly are gaining strength. However, since President Macron dissolved the parliament in June, according to constitutional rules allowing only one dissolution per year, the National Assembly can only be dissolved after June 2025.

'Dark Clouds' Over French Financial Markets

Experts believe that the deadlock in the French cabinet will also impact the financial markets. The spread between the French 10-year government bond yield and the German 10-year government bond yield, considered the safest in Europe, reached 0.90 percentage points last week, marking the highest level since the Eurozone sovereign debt crisis. Alex Everett, an investment manager at the UK-based asset management firm Aberdeen, predicted, "Due to the increased fiscal deficit burden caused by the lack of decision-making, the spread between French and German yields could rise to 1 percentage point." The rise in government bond yields has also negatively affected the French stock market. The French CAC index has fallen about 11.5% from its record high in May.

The euro is also expected to weaken further. According to Bloomberg News, since President Macron's announcement of the early general election in June, the euro has fallen about 2.7% against the dollar, a larger drop than other G10 countries. Sean Osborne, chief currency strategist at the Canadian Scotiabank, analyzed, "(After the cabinet collapse) the overall fiscal policy setting will weaken to pass the budget, which could put greater downward pressure on the euro."

This content was produced with the assistance of AI translation services.