[Decoding France] - France’s Unprecedented Crisis

France’s Unprecedented Crisis

Since June 9, 2024, France has entered a new era of instability, disrupting over six decades of relative political calm. With six prime ministers in seven years, and four in just one year, the French executive has become the second most politically unstable in Europe, trailing only the United Kingdom and tied with Romania.

This political instability is compounded by economic and financial challenges, driven by rising debt, ballooning public deficits, and an inability to pass a budget. The downgrading of France's credit rating by Moody's on Friday is one of the worrying manifestations of this.

Act 1: Barnier Government Censured

Michel Barnier's government was toppled after heated budget debates, just hours before a vote on the social security budget. The vote of no confidence united the far-right National Rally (RN) and the entire left-wing bloc, now consolidated under the banner of the New Popular Front (NFP).

Barnier had made last-ditch efforts to secure Marine Le Pen’s National Rally party support by conceding to most of its demands, such as lowering electricity taxes and reducing total reimbursements for medications. However, his refusal to approve her final request-a significant pension increase-sealed his fate. Let us highlight here the opportunistic U-turn of the National Rally (RN) regarding the indexation of pensions to inflation. With 331 votes in favor, Barnier's government was officially overturned on the evening of Wednesday, December 4, triggering yet another period of political limbo.

The situation that followed was paradoxically both historic and repetitive.

Historic, because this is the first no-confidence vote to succeed since 1962, in a then vastly different context, as it ultimately strengthened General de Gaulle, who dissolved the assembly and won a large majority in the legislative elections.

Repetitive, because the same discussions resurfaced immediately after the vote, with the same names circulating for the position of prime minister that were heard back in July. Each political actor seems to be falling back into familiar positions, with a very slight shift to the left on the part of the Socialists. On the side of La France Insoumise, Jean-Luc Mélenchon’s party, calls for the resignation of the President of the Republic have resumed with renewed intensity. The broken record plays its toxic tune once again, highlighting a chronic inability among political actors-whether from the presidential camp or the opposition-to take responsibility for the political chaos.

Act 2: The President Returns to the Fore

Following weeks of political disengagement after appointing Michel Barnier as Prime Minister, the President of the Republic stepped back into the national spotlight the day after the no-confidence vote, on December 5. In a televised address to the nation, he called for the formation of a "government of national interest" and reaffirmed his intention to remain in office until 2027.

The President's return to prominence continued into the weekend, as global attention turned to France for the grand reopening of Notre-Dame Cathedral, five years after the iconic landmark’s restoration began. On the sidelines of the ceremony, a meeting between Donald Trump and Volodymyr Zelensky underscored the President’s diplomatic acumen. Balancing domestic and international affairs, he also invited all parliamentary forces-excluding the RN-for discussions at the Élysée Palace.

The image of a ‘Jupiterian’ president, master of the clocks, resurfaced once again. He claimed to have regained this control over time on Tuesday, December 10, by announcing that he would appoint a new prime minister within '48 hours' and that he did not intend to dissolve the National Assembly again before the end of his term in 2027. It should be noted that he failed to meet the first of these deadlines, as he appointed his prime minister the day after the announced date. Does this mean he might also fail to honor his second commitment regarding the dissolution? That is a possibility.

Although rumors of Macron’s resignation have surfaced, they seem quite unlikely. Resignation would deepen the crisis, not resolve it, as the new president would be unable to dissolve the National Assembly before the summer. Additionally, the constitutional requirement to hold a presidential election within 20 to 35 days would leave insufficient time for substantive campaigns or crisis solutions. Macron himself dismissed this possibility during his address to the nation, emphasizing the "thirty months" remaining in his term. President resignation is therefore an extremely rare occurrence in France, having happened only once in the history of the Fifth Republic, in 1969, when General de Gaulle resigned following the rejection of a referendum on regionalization. Otherwise, it remains an exceptionally uncommon practice, much like the impeachment of the President of the Republic, which has never been successfully carried out in France.

Act 3: Bayrou, the Reluctant Prime Minister?

The first shall be last. This adage seems to have come true for François Bayrou, the centrist leader, an early kingmaker of Emmanuel Macron, and a three-time presidential candidate. After a week of negotiations, he was ultimately appointed Prime Minister, despite reports in the press suggesting that the President had initially excluded him. This 73-year-old former Minister of Education, who briefly served as Minister of Justice in Emmanuel Macron’s first cabinet in 2017 and is currently the mayor of Pau, has now seen his dream come true. He is expected to form a government of "general interest", i.e in the interest of all, but will face difficulties in broadening his base.

What Support Can He Count On?

A notable shift since the summer is the Socialist Party’s changing attitude. For the first time, the party seems open to negotiations with Macron’s party and the right, not to form a government led by a centrist prime minister, but to agree on specific legislative compromises, particularly to pass a budget in early 2025. The 66 Socialist MPs could agree not to censure François Bayrou's government in exchange for a commitment not to invoke Article 49-3, the constitutional mechanism that allows the government to bypass a parliamentary vote to pass legislation. Among the other conditions set by the Socialist Party are freezing the pension reform and rejecting any new immigration law. However, this raises questions about the survival of the left-wing alliance, the New Popular Front (NFP), as Jean-Luc Mélenchon’s France Insoumise remains strongly opposed to any cooperation with Macron’s party or the right.

As for the National Rally, their position so far is quite uncertain. They announced they would not necessarily vote a motion of no-confidence, but they are still very demanding, especially on the budget. While the party had been focusing on institutional respectability and avoiding chaos, it recently reverted to its anti-system stance by voting for the no-confidence motion - a move more aligned with disruption than construction. Some attribute this shift to the legal proceedings over alleged misuse of EU funds. However, it’s a risky strategy, as the National Rally’s largely working-class electorate could be most affected by the lack of a budget and government.

Act 4: What Budget for 2025?

Reaching a budget is critical, as France’s public deficit is set to reach 6.2% of GDP by year-end, with public debt at 112.3% of GDP (€3.23 trillion).

Put in another way, the budget deficit would fall from 6.1% in 2024 to 5.3% in 2025", a performance barely below that of the 2025 finance bill initially presented by the Barnier government (= 5%).

The budget extension will be accompanied by a "special law", allowing the government to collect taxes starting January 1, 2025 and ensuring the state continues to function - as announced by the President in his address to the nation. The special bill contains three articles: the first enables taxes to be collected by the government, the second authorizes the Agence France Trésor to take out a loan, and the third to finance Social Security through debt. This law, used solely once in history, in 1979, would ensure that the state continues to function. It is currently being examined by Parliament and should be adopted very quickly. The National Assembly has already adopted it unanimously.
 
However, several questions remain unanswered. Can the income tax scale be indexed to inflation to prevent millions of French citizens from facing tax increases? Constitutional experts and legal scholars are divided on this issue. Without such adjustments, up to 8 million people could see their income taxes rise, and 180,000 households currently exempt could begin paying taxes next year.

Act 5: a New Dissolution?

What next? The timing is very complicated, both for Macron and his new Prime Minister. The Constitution is very clear: no new dissolution may take place in the year following legislative elections - which brings us to July 13, 2025, and new legislative elections must take place at least twenty days and at most forty days after the dissolution. It seems very complicated to organize a campaign in July or August, and the risk of a low voter turnout is significant.

If a new dissolution is declared, there is no guarantee that the legislative ballot that follows will bring out a new balance of power in Parliament. It is even likely that the results will be more or less the same as in the last election, unless Marine le Pen is sentenced to ineligibility in March, and consequently loses a significant number of voters because of it. The result would be a new tripartition and the same difficulty in appointing a permanent government. The President could therefore legitimately use this argument as a reason to abandon the idea of another dissolution, especially if he finds a way to collaborate with other parties.

This manifests in three ways.

First, the stalemate of political action. Resigned governments are merely managing day-to-day affairs, and the budget, devoid of any political ambition, has been reduced to the bare minimum, encapsulated in a special law of only three articles. No major political decisions have been made in the past six months.

Second, the erosion of engagement and belief in politics. The numbers are striking: 41% of French people support the idea of a prime minister with no ties to any political party or coming from civil society. Only 14% of French citizens trust political parties, and just 22% trust members of Parliament-a decline of 7 percentage points in just one year. A profound mistrust of all political parties now grips France.

Finally, the third level, which currently looms as a risk: democratic stagnation. While voter turnout was relatively strong in July, participation in future elections could drop significantly due to the current context and citizens' perception of events in France. Such distrust can only suppress civic participation, as was evident in the December by-elections held in the Ardennes.

This unfolding drama not only raises questions about France’s domestic governance but also its standing on the European and global stage. As events continue to develop, the world watches to see how France will navigate this unprecedented chapter in its history.

Copyright image : Thomas SAMSON / AFP
France's newly appointed Prime Minister, Francois Bayrou is greeted by outgoing Prime minister Michel Barnier at the Hotel Matignon in Paris on December 13, 2024.