Macron Faces Mounting Pressure To Find New French Prime Minister

(Dec 9): Key allies of Emmanuel Macron are heaping pressure on the French president to name a new prime minister quickly, with time running short to pass a stopgap spending bill before the end of the year.

Francois Bayrou, a veteran centrist politician who’s been cited as a possible premier, warned over the weekend that “we can’t continue like this.” Yael Braun-Pivet, the head of the National Assembly and a member of Macron’s party, called on the president during a Sunday radio show to name a new prime minister “in the next few hours.”

The sense of urgency comes days after Marine Le Pen’s far-right National Rally joined a left-wing coalition to topple the government, leaving France’s political system in disarray. Macron said he would name a new premier in the “coming days” who would then pass an extraordinary spending bill before mid-December to keep the country running.

The president met with key political chiefs Friday to begin the process of landing on a prime minister who could last longer than the outgoing premier, Michel Barnier. Macron held discussions with leaders from his own party as well as with center-right politicians and Socialist lawmakers.

On Monday, Macron will meet Communist and Green lawmakers. He hasn’t indicated if he’ll consult with the anti-migration National Rally, which is the largest single party in the lower house of parliament and played a key role in bringing down Barnier’s government.

National Rally President Jordan Bardella urged Macron to meet with his party to chart a way forward.

“I ask to be received with Marine Le Pen so that we can present our red lines,” Bardella told France 3 TV on Sunday. “You can’t pretend we’re not here.

In an interview with Bloomberg on Wednesday, Le Pen said a new budget could be passed “in a matter of weeks” if the government fell. She said the next prime minister would have to narrow the budget deficit more slowly.

In an address to the French people on Thursday, Macron signaled an aggressive approach to the far-right and left forces that brought down the government, saying that they “voted for disorder” and that “they voted not to create but to break down.”

France is adrift at a critical moment with Donald Trump aiming to drive a resolution to the war in Ukraine, the European Union locking down new trading relationships with South America’s biggest economies and the bloc’s biggest companies struggling to compete with their US and Chinese rivals. Macron met with Trump on Saturday when the US president-elect was effectively the guest of honor at the reopening of Notre Dame cathedral.

The uncertainty in Paris over the future of Barnier’s government and its budget fueled investor concerns about the country’s already stretched public finances in recent weeks. Under selling pressure, the state’s borrowing costs compared to peers rose at one point to highs not seen since the euro zone’s debt crisis more than a decade ago.

However, markets calmed as opposition parties indicated willingness to be more cooperative after the collapse of Barnier’s government. French government bonds rallied for a fourth day on Dec. 6, driving down the 10-year yield over German equivalents.

Macron’s troubles began last June when he called a snap election ostensibly to shore up his support after a catastrophic Europe-wide vote. The plan backfired, delivering a National Assembly split into three irreconcilable blocs: a strong left-wing coalition, a smaller center that backed Macron and an expanded nationalist group led by Le Pen.

The result of the June election made Le Pen the pivotal power broker in the lower house of parliament, giving her National Rally the ability to short circuit the government. Which is exactly what they did when it came time to pass the 2025 spending bill.

Barnier’s budget legislation included about €60 billion ($63.4 billion) of tax hikes and spending cuts to bring the deficit to 5% of economic output from 6.1%, closer in line with stricter European Union regulations. Even though Barnier made multiple concessions to Le Pen, she still toppled his administration.

Barnier became the shortest-serving prime minister since the French Republic was founded in 1958.

Whoever becomes the next prime minister of France will have to deal with the same parliamentary calculus as Barnier, and will likely face the same hurdles to passing a full budget for 2025.

While Bayrou’s name has been floated as a possible premier, it could also be someone from the outgoing cabinet, such as Sebastien Lecornu, in charge of defense, or Bruno Retailleau, interior minister. Bernard Cazeneuve, a former prime minister for Socialist President Francois Hollande, is also often cited.

“If I can help in any form to get out of this, I will do it,” Bayrou told reporters over the weekend.

Source: Theedgemarkets