Emmanuel Macron has blown threw 7 Prime Ministers (4 in a year) headed for number 8.
Macron Fails to Stabilize France
France’s prime minister Sebastien Lecornu has resigned after just 27 days.
France24 reports France’s Macron tasks outgoing PM Lecornu to hold final talks to stabilize country
French President Emmanuel Macron has asked outgoing Prime Minister Sebastien Lecornu to hold final talks by Wednesday evening with political parties to stabilise the country, Macron’s office said on Monday. Earlier on Monday, Lecornu offered his and his newly formed government’s resignation after allies and foes alike had threatened to topple the government.
Reuters reports Macron asks for fresh talks after new Prime Minister Sebastien Lecornu resigns
The outgoing prime minister said on X that he has accepted Macron’s request for last-ditch talks.
“I’ve accepted the president’s request to hold last talks with political forces for the stability of the country. I will tell the head of state Wednesday evening if it is possible or not, so that he can draw all the necessary conclusions.”
Socialist Secretary General Pierre Jouvet spoke to reporters outside the party headquarters in Paris.
The video is in French, but here’s what he said translated into English:
“The head of state (Macron) has three options: resignation, dissolution, or the appointment of a prime minister from the left and the Greens. The Socialist Party is very clear. Democracy in our country must finally be respected. Priority must be given to the left and the Greens to govern this country.”
“We will do everything to prevent the far right from coming to power. It represents a danger to France and its workers. In the coming hours, we will meet with our left-wing and Green political partners, from ‘Place Publique’ to the Communist Party, who share with us the same desire to govern and act to finally find a solution to this political crisis.”
“We are not calling for the dissolution or departure of the head of state. We are calling for solutions that will allow French people to finally be respected, to live better lives, and to avoid paying the price for this crisis.”
Budget Danger Zone
Monday’s political crisis came days before the government was due to submit its 2026 budget bill to parliament.
Under French law, the government has until October 7 to deliver a 2026 budget bill, although the constitution allows some flexibility until mid-month.
With time short, it is increasingly likely emergency legislation will be needed to keep the government running and prevent a U.S.-style shutdown.
Emergency stopgap legislation could authorise spending, taxation and borrowing from January 1 – but with strict limits on public finances:
Spending: The government can issue decrees to roll over 2025 spending limits into 2026, effectively freezing most expenditures without adjusting for inflation.
Pensions: One key exception is pensions, which automatically rise with inflation—potentially adding billions in costs.
Taxes: Existing taxes can continue to be collected, but the tax brackets cannot be adjusted for inflation. That could push thousands of households who are currently exempt into income tax liability.
Borrowing: The law allows the government and social security bodies to continue issuing debt on capital markets.
Macron’s Fault
This is all Macron’s fault for many reasons, but the latest reason is that after a no-confidence motion took down the government of Prime Minister François Bayrou, Macon replaced his cabinet with essentially the same people.
Bloomberg was spot on with its analysis yesterday Macron’s Continuity Cabinet Risks a New Government Collapse
French President Emmanuel Macron’s decision to appoint a broadly unchanged cabinet sparked an immediate backlash from opposition parties and even among his own supporters, undermining Prime Minister Sebastien Lecornu’s chances of surviving a make-or-break week in parliament.
Most senior members from the cabinet of ousted premier Francois Bayrou were renamed to their posts in a clear continuation of Macron’s centrist policy aims. The president didn’t reappoint Eric Lombard as finance minister, but his replacement, Roland Lescure, is a close ally who previously ran the industry portfolio.
Lecornu will formally outline his policy priorities in a speech to the National Assembly on Tuesday, after which he could face no-confidence votes, as threatened by opposition groups.
French Socialist Party leader Olivier Faure, whose party holds a potential swing vote in parliament, said Macron’s group is imploding and the new government has no legitimacy left. As things stand, he said there is nothing that would stop his party from voting to topple Lecornu this week. “We are witnessing an unprecedented political crisis,” he said.
Lecornu, who governs without a majority in the National Assembly, faces the same intractable problem that sank the premierships of his two predecessors: passing a budget through a fractured parliament that will likely include unpopular spending cuts and tax increases needed to rein in the largest deficit in the euro area.
New Records Set
Lecornu did not last until Tuesday (tomorrow) where he was scheduled to present his solution.
He would have been outed in a note of no confidence so he resigned rather than be removed by vote.
Gone in 27 days is a new record. Also note that Lecornu quit less than 24 hours after Macron announced a government that retained most senior members from previous cabinets.
24 hours is a record that won’t be broken.
Macron can name a new prime minister, who would then need to propose a fresh cabinet. He could call a parliamentary election; or he could resign himself triggering new national elections.
What’s it All About?
The crisis revolves around Eurozone fiscal rules. The EU never enforced its Growth and Stability Pact or Maastricht Treaty rules. But now it wants to.
France is one of the worst offenders.
Compliance Rules
- Deficit rule: a country is compliant if (i) the budget balance of general government is equal or larger than -3% of GDP or, (ii) in case the -3% of GDP threshold is breached, the deviation remains small (max 0.5% of GDP) and limited to one year.
- Debt rule: a country is compliant if the general government debt-to-GDP ratio is below 60% of GDP or if the excess above 60% of GDP has been declining by 1/20 on average over the past three years.
France’s general government gross debt is projected to reach approximately 116.0% of its GDP in 2025.
France Budget Deficit and Debt-to-GDP 2024
Financial Crisis in Europe With France at the Epicenter
Please recall my March 27, 2024 post Expect a Financial Crisis in Europe With France at the Epicenter
What’s the Basic Problem?
Eurointelligence says “Technology is the main cause of the decline. Geopolitics is what accelerated it.”
Technology is not the problem. The Maastricht treaty that created the Eurozone is flawed. And it cannot be fixed without unanimous agreement
The EU Is Dysfunctional
In a single word, the EU is dysfunctional. That’s the problem, not technology. The Maastricht treaty itself is a big part of the reason the EU is dysfunctional. The Euro itself, with one common interest rate, is fundamentally flawed.
France and Italy Noncompliance
- France Debt-to-GDP: 113% vs target 60%
- France Budget Deficit: 5.8% vs target 3%
- Italy Debt-to-GDP: 135.3% vs target 60%
- Italy Budget Deficit: 3.4% vs target 3%
France is Ungovernable
There is no chance of any political party addressing the debt and deficit rules.
So, why would anyone want to govern?
The only answer is arrogance, but arrogance will not fix any problems.
Currency Crisis Awaits
Nothing has been solved because nothing can be solved. It’s politically impossible.
I keep repeating the idea “a currency crisis awaits”.
However, things are so screwed up globally that a crisis can start anywhere. The EU, US, China, and Japan are all possibilities.
There is no fiscal sanity anywhere.
Related Posts
January 10, 2025: The Political Crisis in France Is About to Get Much Worse
The entire eurozone is in shambles, and Trump’s demands will accelerate the crisis. One seriously must wonder if that is his real goal.
Well, that was certainly accurate.
August 27, 2025: French Government on Verge of Collapse Over Debt Crisis, What’s Next?
A vote of confidence is scheduled. Expect the government to fall.
By August 27, 2025, everyone was making that call. No credit to latecomers.
September 8, 2025: French Government Collapses in No-Confidence Vote, What’s Next?
Bye Bye Bayrou. An amusing “Let’s block everything movement” takes hold.
And here we are with a second government collapse in less than a month.
Macron is a low-level Rothschild banker. He has been instructed to stay put.
The French are disgusting. With all the foreign (mostly colored muslim) invaders raping their women and killing their children, they still vote Woke and mainstream (center, socialist, Christian Democrat, Green, all the same).
How politically correct are these idiots.
I don’t mind actually.
Good riddance.
Macron is foolish for keeping to try the same thing despite getting the same result. It has been reported he even asked Lecornu to try again until Wednesday (with Lecornu still leaving regardless). I am not sure it’s the Eurozone fiscal rules that matter, France is big enough that it can safely ignore them, but rather having achieved his tax cuts for the rich, Macaroon wants to slash benefits to pay for them so he does not leave France with the legacy of bloating its debt, especially with higher interest rates compared to pre-covid.
Trying to delay the inevitable.
The top three rulers in Europe – Macron, Starmer and Merz – are all at record low approval levels (< 20%) because they’re obsessed with Ukraine defeating Russia, when that’s somewhere down around #23 on the list of things their people care about. The EU pulls out all stops to hobble anyone who stands for their own national sovereignty. Robert Fico got shot. Hungary’s Orban is the EU’s top enemy. AfD is discriminated against heavily in Germany and Georgescu was stricken from the ballot in Romania. The Europeon rulers talk about democracy but don’t give single shit what their people want. The most popular rulers in the world are in the “bad” countries that are supposedly not “democratic”.
Sentient, some might say that France and other EU countries are pushing for war BECAUSE they know their economies are crumbling.
“We are not calling for the dissolution or departure of the head of state. We are calling for solutions that will allow French people to finally be respected, to live better lives, and to avoid paying the price for this crisis.”
That is not the way math works.
Margaret Thatcher famously said:
Parties left and right bribed voters with welfare benefits for many decades and this is the end stage of DEMOCRACY.
“Insanity is doing the same thing over and over again and expecting different results.” — Albert Einstein
Dead man walking.
Mish points to the root cause when he says: “The EU never enforced its Growth and Stability Pact or Maastricht Treaty rules. But now it wants to.”
If you look at the chart above, France’s debt exploded after Covid, as did that of most EU countries. Budget rules were ignored. What is the root cause of this sudden change?
My theory: The timing of the EU, without a lot of consultation (and seemingly arbitrarily) deciding to enforce Maastricht budget rules NOW just happens to coincide with French budget negotiations. I believe Macron and Merz (and their elites) are engaged in a power play, and the National Assembly isn’t playing along. If my theory is correct, Macron is colluding with Merz, the ECB and the EU authorities to put the screws to France to get draconian cuts in social spending, so Macron can blame the EU (while shielding his own elites). The stakes are high because Italy will then have to follow, along with the quite a few other national dominoes.
The EU is self-destructing precisely because the central authorities (and bondholders whose interests they are protecting) are now interfering in national domestic politics, as they did in Ireland, Greece and Italy in the past.
What surprises me as other leaders like Meloni of Italy are not speaking up against enforcing the Maastricht rules at a very perilous time in EU politics and economics.
This could be the event that burns down the EU altogether. In a contest between the short-run interests of bondholders and long run national political stability, the former may discover the limits of their power, particularly when it comes to France. The saying in France is “Liberte, Egalite, Fraternite” not “les Richesses.”
As for me, I say “Vive la France!”
<<The saying in France is “Liberte, Egalite, Fraternite”>>
The Americans have a similar one: “I can’t believe it’s not butter”
“There is no fiscal sanity anywhere.”
That sentence is true with and without the word “fiscal”.
There remain a few pockets of sanity, but very few.
France and Germany represent 40% of the EU’s GDP and both are now completely FUBAR.
I reckon that this fact has more than a little to do with recent price action in gold and silver.
> France and Germany are now completely FUBAR
.. and Italy not far off. As a result of the states failing there will also be a financial collapse of the non-elected Brussels setup headed by (insert your favorite expletive here) and a reverting to national values. So much for the NWO. Won’t work as planned.
Debt seems to be everywhere along with inflation. Seems the whole world is living above their means.
Billions of promises representing trillions of dollars will simply not be kept.
We’re still pretending they will.
Thhe Whole World is on fire BUT TECH keeps going higher, to Mars and beyond. There’s a bit more room before the Zeplin blows up.
I went to Europe a few weeks ago and returned a few days ago from a first hand tour of both France and Italy.
Calling this a crisis outside of the inner parties of government is a misnomer. The vast majority of people are totally unfazed by the headlines and really give a crap about the govrenment.
The protests were more street parties and parades with music and dancing than protests.
What is super interesting to me is how many small to tiny businesses exist in both countries with the proprietor living over the retail space. Markets of all shapes and sizes. This leads to interesting combinations of intense craftsmanship and artistry in foods and the structural features of villages, towns and cities.
People live closer to the earth than we ~ in the insulated by technology US. The Italians and French are far closer to poverty in some respects than I expected, but far richer in self-reliance than I could have imagined.
Prices are lower, and quality is far higher than in the US.
The best take away is the fact that people are not fat slugs like I see every day in the US. I went to a Costco over the weekend and observed the unreal display of public gluttony and obesity.
Whatever governments do, the majority of people should learn to rely on themselves and keep control of the production of healthy foodstuffs closer to home than the US is doing.
Americans are soooooo tethered to the newsfeeds of partisan politics, division and commercial distractions.
Makes me glad to own a productive farm and enjoy a broad palette of interests and hobbies.
There is merit in the philosophy that:
“The government that governs best, is the government that governs least”.
>>>
There were some standout displays of exceptional consumerism:
Monaco, Maranello Italy and the Cannes ~ Nice area of South France. Paris has its LV Suitcase and a few opulent areas…
>>>
My wife and I recently returned from a trip to the Dolomites (Cortina d’Ampezzo and Colfosco). There were plenty of rich Europeans driving around in Ferraris and Porsches and spending lavishly in high-end shops.
I agree with most of what was said. My wife and I also like to travel in Europe and have observed the points you made. I’ve also noticed that Europeans don’t have trouble expressing opinions. That’s a lost art in obese America where social conventions pretty much have ended free speech.
Great insights!
There is one more thing that Macron can likely do, in addition to those three. He could put a referendum before the French people, like Charles de Gaulle did in 1968. What should he ask in the referendum?
The solution is straightforward, it’s the politics that’s a problem.
Options for France to Close the Deficit.
(a) tax wealth?
(b) tax high incomes (primarily)?
(c) tax all incomes (proportionately)?
(d) tax spending – increase the VAT?
(e) cut all government spending by 10% uniformly, then renegotiate priorities following national elections
(f) exit the euro and EU, float the currency, default on prior debt “1930s style” or “1960s style”.
The correct answer is probably “all of the above”.
P.S. France has been through much worse, and survived. WW2, WW1, 1848, Napoleon, French Revolution, insane kings, bubonic plague…
I question your word “survived.” But I appreciate your opinion. We have visited France twice in the last 6 months. A total of 7 weeks. We learned a lot about the French. My favorite comment was from a Frenchman who said: “ the French are lazy.” I could write an essay about what we learned about that comment.
They are in a world of hurt….of their own choosing.
Or, the French are “patient” or reluctant to do another mans bidding in exchange for the loss of their time.
I’ve spent a lot of time in France over the past 2 decades as well.
I’d say the French are not “lazy” as Americans would use that term. They make many nearly flawless products with a high sense of propriety. They are aware of their rights and unwilling to waste time without being appropriately rewarded. We might consider them to be overly entitled to their perks? But that’s not the same as lazy.
Like the U.S., they share a wide range of opinions about who should pay for the socialist side of their system, which I tried to capture in the list of options.
“Is my husband …
a) a man or
b) a man?”
Question (Y/N): “Should France exit the Eurozone?”
No one wants to lead. Same problem in most US cities. It’s easier to blame someone else than solving a problem.
We don’t elect leaders anymore.
It doesn’t matter whether or not you elect leaders when they are saddled with all the mistakes of the prior administrations.
The snowball has been rolling down the hill a long time now in the Western countries and it’s gotten way to large for any one person (leader) to fully control. It’s going to increasingly become more unstable as it gets even larger until it eventually crashes.
I estimate the crash here in the US has a 20% chance of happening yet this year.