French PM Barnier resigns after historic no-confidence vote

French Prime Minister Michel Barnier has announced his resignation, set to take effect on December 5 morning, following a no-confidence vote that saw far-right and leftist lawmakers join forces to topple his government. 

Barnier, a seasoned politician and former European Union Brexit negotiator, will now be remembered as the shortest-serving prime minister in modern French history, Caliber.Az reports via foreign media.

His resignation comes after intense political turmoil and a growing crisis within the eurozone's second-largest economy. 

The decision follows a dramatic vote late on December 4, marking the first time a French government has lost a confidence vote since 1962, when Georges Pompidou faced a similar fate.

Barnier's brief tenure ended amid mounting tensions over an unpopular budget that sought 60 billion euros in savings, part of an effort to reduce France's gaping fiscal deficit.

The controversial budget plan, which was pushed through an increasingly fragmented parliament without a proper vote, became a point of contention for both the hard left and far-right lawmakers. Marine Le Pen's far-right National Rally labelled the budget as excessively harsh on working-class citizens, while opposition from the left further sealed Barnier’s political downfall.

The resignation deepens an ongoing crisis for French President Emmanuel Macron, whose decision to call a snap election in June is now seen as a miscalculation. Macron, who faces mounting pressure to resign, remains in office until 2027, but the current turmoil has significantly diminished his political standing.

An online poll conducted just after the no-confidence motion revealed that 64% of French voters are calling for his resignation.

Le Pen, speaking to TF1 TV, described Macron as the "main culprit" for the political crisis. She argued that the dissolution of parliament and the subsequent no-confidence vote were direct consequences of his policies and the growing divide between the French government and its citizens. 

Although a small majority of voters supported the move to remove Barnier, concerns about the long-term economic and political fallout remain prevalent. A poll by Toluna Harris Interactive for RTL broadcaster revealed widespread apprehension about the potential consequences of the ongoing instability.

The resignation of Barnier also raises serious questions about France's fiscal future. With the year-end approaching and no stable government in place, the country faces the risk of entering 2025 without an approved budget. The French constitution does allow for emergency measures to avert a shutdown, but political uncertainty continues to weigh heavily on investor confidence.

Analysts warn that the prolonged instability could dampen both investment and consumer spending, further exacerbating the economic challenges facing the country.

Macron, reportedly aiming to appoint a new prime minister before the upcoming reopening of the Notre-Dame Cathedral on December 7—an event which US President-elect Donald Trump is expected to attend—faces an uphill battle. Any successor to Barnier will be tasked with navigating the same complex political landscape, with no new parliamentary elections scheduled before July.

This ongoing crisis has already shaken investor confidence, with the risk premium on French sovereign bonds nearing a 12-year-high. The political deadlock is likely to continue placing pressure on French assets, as the nation grapples with its deepest political crisis in decades.

As France enters a period of profound political instability, the country’s future economic prospects remain uncertain, and both investors and citizens alike await the next chapter in this political saga.

By Aghakazim Guliyev