Jordan Bardella of Rassemblement National threatens to overthrow the French government

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Jordan Bardella, leader of France’s Rassemblement National party, warned on Monday that they would not hesitate to bring down the government over the budget, which Prime Minister Michel Barnier said was crucial to tackling the country’s growing deficit. .

Negotiations between Barnier and RN aim to find compromise on the stalled budget ahead of a key vote in Parliament scheduled for later on Monday, raising the risk that the minority government could collapse. dump this week.

The fate of Barnier’s budget and government remains largely in the hands of Marine Le Pen’s far-right faction RNlargest party and key voting bloc in Parliament.

“The RN will activate the censure voting mechanism unless there is a last-minute miracle and Barnier changes his draft law between now and 3 p.m.,” Bardella told RTL radio on Monday.

“I don’t have much hope he will do so because he has ignored and despised us. [and our proposals] in recent months.”

Since being appointed prime minister in September, Barnier has rushed through one Financial package of 60 billion euros for 2025, including significant tax increases, all aimed at reducing the deficit to around 6% of national output.

Investor become increasingly concerned that he would fail to do so, plunging France deeper into political turmoil just as the economy collapsed.

French stocks fell on Monday, underperforming other major European stock markets, with the Cac 40 index down 0.9%. The euro weakened 0.6% to $1.051, with Joe Tuckey, head of foreign exchange analysis at Argentex, saying the standoff “continues to undermine confidence in the euro overall.”

France’s 10-year borrowing costs were unchanged on Monday at 2.9%, as the country’s bonds missed out on a broader euro zone debt hike. The gap, or spread, over German bond yields – a key measure of the riskiness of French bonds – increased to 0.83 percentage points, after hitting a 12-year high of zero, 9 points last week.

“It seems difficult to see how this works out well for the market because [government] persists, which implies compromises are only likely to lead to larger deficits, or Barnier continues to hold his ground, thereby leading to a spike in political instability,” analysts said. Note at Rabobank.

Pierre Moscovici, head of France’s independent state audit agency, warned that the country needs political stability if it wants to fix its public finances.

“We need to give a sign that we are taking back control [over deficits] and it is true that with the vote of no confidence we are entering a period of instability,” he said on France 2 television on Monday. “Our financial situation is very dangerous, worrying.”

Le Pen affirmed all of the RN’s “red line” demands must be met if the government is to avoid a vote of no confidence. On Sunday, budget minister Laurent Saint-Martin said there would be no further changes to the controversial security spending bill, one of three bills that make up the budget, despite a spokesman government on Monday said it “remains open” to further discussions. with RN.

Without a majority in parliament, drawing up a budget proved difficult for Barnier, forcing him to make concessions not only to the RN but also to his own MPs. Those adjustments cut about 10 billion euros in planned savings from the social security budget and will likely put Barnier’s target of reducing the deficit to 5% by the end of 2025 out of reach.

On Thursday, Barnier abandoned plans to increase electricity tariffs, a measure fiercely opposed by the RN and other parties. But Le Pen continues to make other demands such as canceling plans to temporarily freeze pensions or reducing reimbursements for medicines and doctor’s visits.

The left-wing bloc, Nouveau Front Populaire, has also opposed Barnier’s budget for weeks, and on Sunday confirmed that all four parties that make up the bloc, including the more moderate Socialists , will vote on a motion of censure.

If Barnier’s government is voted down this week, it would be the second time French lawmakers have taken such a step since the Fifth Republic was established in 1958. This would also making Barnier the prime minister with the shortest time in office during the same period.