French government faces collapse as no-confidence vote nears

The French government is on the verge of a collapse this week as National Rally (RN) leader Marine Le Pen announced plans for a no-confidence motion against Prime Minister Michel Barnier, who took office in September.

The vote could leave the country without a functioning government or a budget as it enters the new year.

Le Pen’s RN and the left-wing coalition have enough votes to topple Barnier. The no-confidence vote is expected to take place as early as Wednesday and is likely to pass.

If that happens, Barnier would become the first French prime minister ousted by a no-confidence vote since 1962.

The parties announced the measure after Barnier invoked a controversial section of French law to pass a social security budget bill without a vote.

Investors reacted quickly as France’s political crisis deepened, raising doubts over the approval of the annual budget.

The government is struggling with a budget plan involving $63 billion in tax hikes and spending cuts. If not approved by December 20, it may push forward using constitutional powers.

Since President Emmanuel Macron’s snap elections in June, France’s CAC 40 index has fallen nearly 10%, the worst drop among major EU economies.