Barnier threatens to fall

60 billion hole in France’s budget

Prime Minister Michel Barnier could stumble across a gigantic hole in the budget.(Bild: AFP/SEBASTIEN BOZON)

The dispute over the budget is putting France in a difficult financial situation. "Our situation is dangerous", stated the head of the French Court of Auditors, Pierre Moscovici, on Monday. There is a risk that the budget will be blocked in parliament. Prime Minister Michel Barnier is even at risk of being ousted.

The right-wing nationalist party Rassemblement National (RN), led by prominent MP Marine Le Pen, is likely to support a motion of no confidence in the government in the coming days, said its chairman Jordan Bardella - unless a "last-minute miracle" happens.

Barnier leads a minority government based on the party alliance Ensemble, founded by President Emmanuel Macron, and the Republicans. Barnier is dependent on votes from other parties to secure majorities in parliament.

The situation could come to a head this Monday if Barnier makes use of his constitutional powers to push through a law on the financing of social security. This could result in a vote of no confidence by the left, which could bring Barnier down.

There is a 60 million euro hole in the budget
Barnier has to plug a hole in the budget amounting to 60 billion euros. The latest development has already caused considerable unrest on the financial markets. On Wednesday, French government bonds recorded the highest risk premium compared to German bonds since the debt crisis in the eurozone in 2012.

The rating agency S&P left France's credit rating at "AA-" despite the budget dispute. "We could downgrade France's ratings if the government is unable to reduce its high budget deficits or if economic growth falls below our forecasts for an extended period," S&P warned at the same time.