Decoding France: the New French government

The Context: Three Blocs and the Looming Threat of a Motion of No Confidence

The snap elections in July have crystallized a trend in French politics: the political landscape is fragmenting and France’s National Assembly, which used to be characterized by overwhelming majorities, is now divided into three main groups: on the Left, the “New Popular Front” (192 MPs), a clear but increasingly fragmented group; on the far right, Marine Le Pen’s National Rally (125 MPs); and a peculiar, eclectic coalition at the center, which  brings together members of the former presidential majority and right-wing MPs who, until July were vigorously opposed to the President (for a total of 194 MPs).

This is not a classic case of cohabitation like we saw in 1986, 1994, or 1997 with François Mitterand or Jacques Chirac, where the President, whose party had failed to secure a majority in the National Assembly, was forced to work with a prime minister from the opposition. There is no single majority today, instead we have three distinct blocs: a governing bloc of centrist and center-right MPs, which the Prime Minister and President Macron have dubbed the coexistence exigeante (a “demanding coexistence”) and, in opposition, two distinct blocs. The government and the Assembly claim to have built what they call a “common base” (socle commun) - though we are still trying to figure out what they have in common.

Let’s start with the first two challenges before tackling the budget.

Survival first. The primary challenge for the government is survival—that is, staying in power and avoiding a no-confidence vote. The left-wing bloc is determined to bring down the government and has already filed a motion of no-confidence. However, this motion is unlikely to pass as the bloc doesn’t have the majority needed for the motion to pass (which is 289 MPs). The National Rally, which has positioned itself as the “kingmaker,” is threatening a motion of no-confidence but has yet to act on the threat. For now, Marine Le Pen’s party is keeping a low profile, especially while it is dealing with the fallout of a trial involving fake EU jobs.That said, they continue to hold significant leverage over the government with the ever-present threat of motion of no-confidence.

The government, meanwhile, is keen to avoid censure. As a result, it is forced to make concessions to the far right. It has already announced a new immigration law, despite one having been passed less than a year ago. The new measures announced by Interior Minister Bruno Retailleau include extending the period of administrative detention for dangerous illegal immigrants from 90 to 210 days, tightening the conditions for family reunification, and ending the automatic right to reside in France.
11 million people voted for the National Rally in the first round of the parliamentary elections in June, which gives the National Rally significant clout. These voters are worried about immigration and expect results. These issues also need to be seen in the broader context of an increasingly right-wing European Parliament and a renewed interest in immigration issues at the European level, championed by leaders like Giorgia Meloni.

The constant threat of a motion of no confidence explains much of what Michel Barnier’s government is doing. It skews its policy, forces it to compromise with the far right. We could see similar dynamics play out in the future, such as the upcoming debate on whether to get rid of the controversial pension reform, which was adopted in March 2023.

Second topic: restoring trust. The French distrust their politicians: only 27% have confidence in the new National Assembly, the lowest level observed in the last thirty years. Confidence levels in the UK, Germany, and Italy are much higher.

Many in France feel the result of the legislative elections was not respected, with the appointment of a prime minister belonging to the fifth political group in parliament as the ultimate illustration. Many feel disillusioned and there is a real risk that the very high turnout observed during the June legislative elections drops considerably in the next cycle. One of the priorities of Michel Barnier’s government must be to restore confidence by stepping up dialogue with trade unions, NGOs, and all other political forces in order to avoid mass abstention and a rejection of politics, particularly by the younger generation. The prime minister has begun to move in this direction, but is already coming up against the first hurdles, not least of which is the budget...

Budget 2025: In Search of Billions

The debate over the 2025 budget kicked off on the 16th of October in the Finance Committee of the French National Assembly. The budget is both the most eagerly awaited and most perilous in recent history. Firstly, because of the extremely deteriorated state of our public finances, and secondly, because of the political context in which it will be examined. The tension and polarization within the National Assembly is overwhelming, and the first signs of dissensus are already appearing, even within the “common base” that is supposed to constitute the government’s majority.

The draft budget was rejected in the committee, after left-wing parties tripled tax hikes. It is now under review by the full Assembly.
The most striking thing about this budget is the fact that it dismantles many of Emmanuel Macron’s key policies of the past seven years.

It requires €60 billion in savings. It signals a sharp shift away from Macron’s earlier pro-business stance, with plans to raise taxes on both high-earning companies and on some of the wealthiest households. Alongside these tax hikes, the government is also planning significant spending cuts in an effort to reduce the deficit, which is expected to exceed 6 percent this year. This is important given that France is facing scrutiny from the European Commission over its excessive deficit and must provide assurances to avoid further penalties.

A total effort of €60.6 billion

• €41.3 billion in savings:
• €21.5 billion in public spending
• €5 billion for local authorities
• €14.8 billion for social security
• €19.3 billion generated from tax increases, including:
• €13.6 billion from businesses: €8.5 billion in a one-time tax on large companies, an exceptional tax on maritime transport companies, and a (symbolic) tax on stock buybacks
• €5.7 billion from wealthier households (affecting a few thousand households, or 0.3 percent of taxpayers)
   

Job cuts:

• 4,000 jobs cut in the Education sector
• A total of 2,200 jobs cut in public sector
• Increases in staffing for the police, military, and judiciary
   

Goal:

• Reduce the deficit to below 5 percent by 2025
• Reduce it to 3 percent by 2029
   

Today:

• Debt: €3,228.4 billion (102.4%of GDP)
• Deficit: €180 billion (6% of GDP)
   

A parliamentary inquiry has been set up to investigate how public finances have spiraled out of control. While the deficits for the years 2021, 2022, and 2023 can largely be explained by the government’s response to various crises (the COVID-19 pandemic, the war in Ukraine, and the energy crisis), it is much less understandable for the year 2024. On a positive note, this signals a resurgence of Parliament’s role in holding the government to account.

The upcoming budget debates promise to be tough, and it seems likely that the prime minister will have to invoke Article 49.3 of the Constitution, a controversial mechanism allowing the government to pass legislation without a vote, in order to get it through before the end of the year. Threats also lie within the government.Two ministers have already threatened to resign unless their departments receive more funding—one in Justice, the other in Ecological Transition.

Emmanuel Macron: a lame duck?

Where does Emmanuel Macron fit into all this? Traditionally in France, the president has a domaine réservé — “exclusive domain” — which gives the head of state the right to lead on foreign policy and defense matters. Since Michel Barnier’s appointment as prime minister, it appears that Macron intends to focus on these areas, leaving domestic issues to Barnier and his government. His three-day State visit in Morocco this week illustrates this dimension.

Furthermore, Macron’s recent missteps—particularly clumsy remarks regarding the Middle East conflict—have damaged his credibility on the international stage. His comments on the creation of Israel and arms supplies to the region have sparked controversy.

This decline in the French president’s influence also comes against the backdrop of difficulties for him within the EU itself. Who are his partners today? Who still listens to him? The man who, in his two speeches at the Sorbonne, tried to present himself as the driving force and great defender of European integration now seems to be speaking into the void. Tensions between France and Germany are simmering, with disagreements over a range of issues, from Chinese electric vehicles to the handling of excessive debt and public finances and the ongoing Middle East crisis. The once-vaunted Franco-German “engine” seems to be a thing of the past.

One thing is certain, however, the impeachment of Emmanuel Macron, initiated by Jean-Luc Mélenchon’s group, La France Insoumise, will not be examined. He should therefore remain in power until 2027, while Michel Barnier could remain in power for a much shorter period (perhaps three or six months? Most optimistically, one year). In this context, we’ll have to find the right place for ourselves and play our part in the country’s much-needed recovery.

Copyright Ludovic MARIN / POOL / AFP