French PM Barnier: A ‘serious storm’ is on the horizon if the French government falls

"This is a very serious moment," Barnier said in an interview with French broadcaster TF1.

Nov 27, 2024 - 09:00

PARIS — French Prime Minister Michel Barnier said Tuesday that France could face fiscal calamity should lawmakers decide to topple his government over a budget dispute.

“There’s likely to be a serious storm and serious turbulence on the financial markets” if the government collapses, Barnier said in an interview with French broadcaster TF1. “This is a very serious moment.”

French MPs have spent weeks debating the budget proposed by Barnier’s government, which includes a draconian €40 billion in spending cuts and an eye-watering €20 billion in tax hikes. The budget aims to bring down France’s spiraling deficit, which is projected to come in at 6.1 percent of gross domestic product in 2024 — more than double the 3 percent limit required by European Union rules.

However, as parliamentary proceedings have played out, it has become increasingly clear that to pass his budget, Barnier will need to use a constitutional back door that allows him to enact legislation without a vote — but in turn allows lawmakers to put forward motions of no confidence.

An alliance of pan-left lawmakers has already vowed to bring forward a no-confidence motion. If lawmakers from the far-right National Rally decided to back the measure, Barnier’s government would collapse — potentially sparking a Greece-style eurozone crisis at a time when Europe is grappling with a stalling German economy and the possibility of a trade war with the United States.

“The interest rates we have to respect to finance our debt with Chinese or American investors, they are currently almost at the level of Greece,” Barnier said.

The National Rally’s longtime figurehead, Marine Le Pen, said after meeting with Barnier on Monday that she and her fellow far-right lawmakers would vote to bring down the government unless the prime minister scraps planned higher taxes on electricity and a proposed delay to the inflation adjustment for pensions. Le Pen has also criticized the government for failing to cut spending on bureaucracy and medical aid for migrants.