by Mish Shedlock, Mish Talk:
The entire eurozone is in shambles, and Trump’s demands will accelerate the crisis. One seriously must wonder if that is his real goal.
The technocrat French Prime Minister proposes the same budget that collapsed the prior French government.
How is that supposed to work?
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France24 provides this background on Snap Election Turmoil that led to this crisis.
French President Emmanuel Macron dissolved parliament and called a snap legislative vote in a surprise move after the far right trounced his centrist alliance in the European elections. After two rounds of voting on June 30 and July 7, neither of the country’s three main political blocs managed to secure an outright majority. A coalition of the French left, the New Popular Front, surprised everyone by taking the lead with 182 seats, Macron’s Ensemble presidential camp won 168 seats while the far right National Rally, who polls had tipped to win, languished in third place with 143 seats.
Following the election, Gabriel Attal, Macron’s Prime Minister resigned. Macron named Michel Barnier as Attal’s technocrat replacement.
In France, the Prime Minister heads up domestic policy while the president heads up foreign policy and appoints Prime Ministers, typically from members of parliament.
Michel Barnier proposed a budget that failed to pass parliament and on December 4, French lawmakers vote to oust Barnier in the first successful no-confidence vote since 1962.
On December 23, French President Emmanuel Macron named François Bayrou as his new technocrat Prime Minister.
Uncharted Territory
Stepping back one more time, on July 7, 2024, I commented France Is in Uncharted Territory, Expect a Big Political Catfight
No Agreement Questions and Answers
Q: Is there anyone acceptable to the far Left except someone on the far Left?
A: According to [far left leader] Melenchon, noQ: Is there anyone acceptable to the far Right except someone on the far Right?
A: Certainly not.Q: Is there a center Majority?
A: NoThere Is No Magic Solution
There is no magic solution and that was evident immediately from the preliminary results, at least to anyone who can do simple math.
Despite the obvious math problem, perhaps some coalition government compromise forms out of this mess. Just don’t expect it to be stable.
On some issues, notably retirement age, the Far Left and Far Right are aligned. How’s that supposed to ever work?
The ultimate winner in this election will be the party that can stay as far away from the Center/Left catfight as possible.
I believe it’s safe to say that I called this correctly.
PM Bayrou Under Fire
Bayrou is now under fire. He proposed the exact same budget that led to the collapse of Barnier.
Politico reports French Government to Copy-Paste Budget that led to Predecessor’s Downfall.
How can a new government get a budget ready under the tightest of time pressure?
By picking up where their predecessors left off, even if it got them kicked out of office.
That is at least what French Prime Minister François Bayrou plans on doing — using Michel Barnier’s blueprint as a starting point for his own budget, despite the fact that opposition lawmakers ousted him over proposals to cut spending and increase taxes.
After Barnier and his government fell to a no-confidence vote last month over his plans to reduce France’s “colossal debt” through €40 billion in spending cuts and €20 billion in tax hikes, the country entered the new year without a proper budget for the first time in its modern history.
“They can tweak [the budget], but they can’t change it in depth … I don’t really see how they’re going to put forward [legislation] less likely to lead to a vote of no confidence,” the left-wing head of the parliament’s finance committee Eric Coquerel told POLITICO.
There are also concerns that the government may not be able to enact Barnier’s planned one-off windfall tax on big companies and wealthy individuals, as it would mean enacting a law in 2025 to tax revenue generated in 2024. The former premier had touted the move as a way to help reduce the budget deficit without placing too big a burden on majority of French taxpayers.
