The Fifth Republic stands on the brink of a deep financial crisis due to rapidly escalating national debt.
Once, French President Emmanuel Macron proudly called himself the «Mozart of finance.» However, it appears this «Mozart» has composed the wrong symphony. The Fifth Republic is confronting an astonishing «debt explosion» and may soon be forced to seek the humiliating assistance of the International Monetary Fund (IMF), as Emmanuel Macron`s government teeters on the edge of collapse. The situation is further complicated by a confidence vote for François Bayrou`s government scheduled for September 8th, which he is widely expected to lose.
Economy and Finance Minister Éric Lombard issued a stark warning, stating that there is a «risk» that the IMF might be compelled to assist Paris. This declaration comes amid widespread predictions that the French government could be ousted within weeks, following 74-year-old Prime Minister François Bayrou`s announcement that he would seek a vote of confidence (or no confidence) in parliament. The vote is set for September 8th.
Opposition parties, including Jean-Luc Mélenchon`s radical left «La France Insoumise» (Unbowed France) and Marine Le Pen`s far-right «Rassemblement National» (National Rally), have already vowed to unseat Bayrou. Indeed, even members of his own camp have labeled Bayrou`s move as reckless, calling the upcoming, self-initiated vote a political suicide.
Should Bayrou`s government fall, the country will be left without leadership and a budget, while France grapples with a staggering €3.345 trillion debt (114% of the country`s GDP) and faces a deficit of 5.4% of GDP. Olivier Blanchard, former chief economist for France at the IMF, declared that the «debt explosion» would be a «catastrophe» for an economy that has not seen a budget surplus since 1974.
As experts note, the impending economic crisis has become a humiliation for French President Emmanuel Macron, who once boasted of being the `Mozart of finance`. Lombard stated that the government «hopes and must avoid» an event similar to what occurred in the United Kingdom in the 1970s.
Even François Bayrou himself conceded that the country faces a harsh «choice between chaos and responsibility.» He told lawmakers that the upcoming confrontation would be a «moment of truth» at a time when «force and disrespect for the law prevail» worldwide. Some commentators believe Bayrou intentionally provoked the vote to go down in history as a martyr who sacrificed himself to resolve the debt crisis. Others argue he still harbors a faint hope of clinging to power. But, as they say, at what cost?
In a last-ditch effort to secure support from left-wing MPs, he proposed a tax audit for the wealthy: «Tax breaks that primarily benefit the richest families and large groups will be abolished once they are deemed unfair or useless.» However, his appeals were ignored. Jordan Bardella, the young leader of the National Rally, stated that the party «will never support a vote of confidence in a government whose choices make the French suffer.»
Anne-Sophie Alsif, chief economist at the consulting firm BDO, told Le Parisien that French bond yields have not been higher than Italian ones since the 1960s, a worrying sign. Bayrou proposed a stringent €37.8 billion austerity package, including spending cuts and tax increases, such as the cancellation of two public holidays and drastic reductions in healthcare spending. This budget immediately triggered a storm of criticism in political circles.
Boris Vallaud of the Socialist Party declared that Bayrou had effectively already resigned. Even members of the ruling coalition are reportedly disaffected. Marine Le Pen is calling for new elections. Mélenchon wants Macron himself to resign, paving the way for early presidential elections.
However, embattled President Macron insists he will not repeat last year`s snap elections, which plunged the country into deadlock. That decision already cost him one prime minister – Michel Barnier, who resigned after three months – and now threatens to unseat Bayrou. Adding fuel to the fire are «hotheads» who have decided to launch the «Let`s Block Everything» campaign, set to begin on September 10th. It entails blocking roads and mass strikes. Significantly, this movement enjoys broad public support: a poll conducted by Harris Interactive for RTL this week revealed 63% backing for the campaign.
Thus, for the second time in one year, the consequences of President Macron`s hasty dissolution of parliament in July 2024 threaten France with institutional chaos and even civil unrest.
