France is preparing for more political and economic upheaval, as Prime Minister Francois Bayrou and his minority government look highly likely to fall in a confidence vote later Monday.
Bayrou is unlikely to get the necessary votes to win the motion, which he called after struggling to persuade political opponents to back his 2026 budget that envisaged around 44 billion euros ($51.3 billion) in cuts.
The aim has been to bring France’s budget deficit down from 5.8% of gross domestic product (GDP) in 2024 to 4.6% in 2026 — a level that will still sit well above the European Union’s rules for its members.
If Bayrou and his minority government don’t win the vote, the government will collapse less than a year after Michel Barnier’s short-lived administration imploded last December.
That’s likely to rattle financial markets: France’s 30-year bond yield rose last week — alongside the borrowing costs of other major economies — before retreating. On Monday morning, the yield on France’s 30-year bond stood at 4.35% while the yield on the 10-year stood at 3.43%.
