The French government is facing its latest political crisis after Prime Minister François Bayrou lost a confidence vote in parliament yesterday.
Out of 577 lawmakers, 364 voted to dismiss Bayrou's government, while 194 expressed support. That number far exceeded the 280 votes needed to bring down his minority government.
The defeat stemmed from opposition to a proposed €44 billion austerity plan, which includes the abolition of two public holidays and a freeze on public spending.
The proposal sparked widespread rejection from political blocs on the left and right.
Bayrou's fall marks the second time in less than a year that a French prime minister has lost his mandate through a vote of no confidence, after Michel Barnier suffered the same fate in December last year.
The development adds to political uncertainty that has not been seen in France since the era of Georges Pompidou in the 1960s.
President Emmanuel Macron is now facing a major dilemma in naming a new prime minister who can command a majority in parliament.
The political deadlock has added to the difficulties, with calls for parliament to be dissolved and new elections to be held, but Macron has so far refused to take such a step.
The crisis has also dented confidence in financial markets, with French government bond yields falling and debt financing costs rising.
The government is also seen struggling to come up with a 2026 budget, increasing the risk of a fiscal deficit and long-term debt burden.
Bayrou's defeat in the no-confidence vote marks another episode of political instability in France, which is expected to have a major impact on the direction of fiscal policy and the country's economic position in the near term.
