French Prime Minister Resigns Amid Cabinet and Budget Battles
French Prime Minister Sebastien Lecornu has formally resigned after just 27 days in office, marking the shortest tenure in the country’s modern history. His abrupt departure followed a contentious political environment, with intense criticism from both sides of the National Assembly over his cabinet appointments and a proposed budget aimed at addressing France’s growing national debt.
Lecornu, a former defense minister, was the seventh prime minister appointed by French President Emmanuel Macron and the fifth in two years. The sudden resignation, less than 12 hours after naming a new cabinet, surprised many political observers. Lecornu, a staunch Macron loyalist, faced mounting pressure after unveiling a cabinet largely unchanged from the previous government of Francois Bayrou. The unchanged lineup, which failed to bring any significant reform, was met with fierce opposition from both the left and right wings of the National Assembly.
The political turmoil intensified after Lecornu’s decision to maintain a largely unchanged cabinet, leading to sharp criticism from multiple parties. The National Rally party, a right-wing group, publicly called for snap elections, declaring that ‘Macronism is dead on its feet.’ The party also urged Macron to either dissolve the National Assembly or resign as president. Meanwhile, Jean-Luc Melenchon, leader of the left-wing La France Insoumise, urged the government to take action against Macron, further escalating tensions.
The immediate financial repercussions of Lecornu’s resignation were evident as soon as the news broke, with France’s CAC 40 index dropping by 1.3% in a single day, the worst performance among European stock markets. The euro also experienced a decline amid the political instability, reflecting investor uncertainty about France’s economic outlook. Economists warn that without a clear parliamentary majority, it will be increasingly difficult for Macron’s government to pass crucial legislation, worsening France’s financial challenges.
France’s public finances have been under intense strain, with the national deficit reaching 5.8% of GDP in 2024 and public debt at 113% of GDP, well above the 60% threshold set by EU rules. The government has been pushing for an austerity budget to curb spending and stabilize the debt ratio, but the National Assembly’s division has made it difficult to secure support for the plan. The lack of consensus has left Macron’s government struggling to implement key reforms, further complicating the political and economic crisis.
The political instability has its roots in last year’s snap parliamentary elections, which resulted in a fragmented parliament with no clear majority. The lower house is now split among three major blocs: Macron’s centrist alliance, the left-wing New Popular Front, and the National Rally. Without any single party able to command a majority, Macron’s government continues to face challenges in advancing its legislative agenda, compounding the broader crisis in French governance and economics.
Analysts suggest that the situation highlights the growing difficulty of governing in France without a stable parliamentary majority. With no clear path forward, the political and economic challenges may persist, placing further pressure on the French economy and its leadership. The situation remains volatile, and the impact of Lecornu’s resignation could have far-reaching consequences for both domestic and international markets.