Thread by @Valen10Francois

French PM François Bayrou has been ousted by parliament. Macron's 3rd PM to lose his job in 18 months

The stakes are huge:

Will Macron dissolve parliament? Will the left take over? What about the IMF?

A 🧵on what happened and what happens next

What happened?

Ever since Macron's snap election last july, his coalition has shrunk into a small minority government

Last December his previous PM Michel Barnier was deposed by parliament after 3 months.

Bayrou took over facing similarly impossible parliamentary arithmetics

On top of that his government had to deal with possibly the most toxic fiscal situation in a decade

France's deficit is well above the 3% EU target

Bayrou was aiming for 43 bn in savings!

A recipe for disaster with roughly 3 equal parliamentary blocks unwilling to compromise

So Bayrou decided to... call for confidence vote!

He didn't have to. It was very risky. He needed Le Pen or the Socialists to abstain. Both announced within minutes they would take him down.

Game over before it even started

More depressing still for Bayrou, many center-right MPs, who have ministers in this government (!), voted against Bayrou or abstained

The stakes are massive

Rating agencies are tracking France closely. And will be rating France soon

And if deficit is not reined in than the European Commission could put financial sanctions on France.

French borrowing costs have overtaken Greece's

To be sure France is not going to bankrupt, but the cost of servicing the debt is going to keep increasing.

It will also severely reduce France's capacity to deal with future crises or invest in future technologies

The Minister of the Economy warned of a potential IMF takeover. This is unlikely.

Not least because France would have to deal with the ECB long before the IMF

But the fact it's a semi-credible bluff is not very healthy

https://x.com/Valen10Francois/status/1960278486104363291

So what now?

We need a new PM and to push through the budget.

We could have more of the same. A new PM but with all the same constraints as the last ones.

Isn't that literally the definition of insanity? Somehow it's probably the likeliest scenario

Unless...

There's two ways Macron could totally upend the status quo:

1) With a new coalition

2) With new elections

A new coalition with... the left!

In the snap election the left built a common front to split seats between them. It worked remarkably well! To everyone's surprise they were the largest block in parliament...

but well short of the 287 seats you need for a majority

Macron somewhat tried to peel the softer left from the far-left after the snap election but to no avail.

But both of these factions hate each other. The far-left Jean-Luc Melenchon wants all or nothing. The Socialists and Greens are now keen to explore some kind of agreement

But even if they you get creative to find a majority you only just about get there

The reality is that a lot of the right-leaning Macronists would not accept a coalition with the left. The left also has some tough asks on taxation with the "zucman tax" on high-net worth people

So essentially you'd probably have a similar situation where instead of having a center-right government hoping that the left will let them survive

you'd have a center-left government held at gunpoint by the right

What about new elections? Macron could go for another hail mary after all?

This is roughly what the next parliament would look like. The yellow slither is the Macronist bloc. Political suicide

(French pollsters are terrible at guessing legislative elections so this is a projection, but polls are catastrophically bad)

https://x.com/VaubanPro/status/1962194316417245633/photo/1

The latest rumour is that Macron wants to shake things up and instead of having France's majoritarian two-round model move towards some kind of proportional voting system! The Drama!

Except this is roughly what parliament would like, nothing really changes

On top of that you would need to pass a law to to adopt a proportional system. In this parliament. With people who won using the current model. Colour me skeptical

Le Pen is theoretically pro-PR ... but conveniently wants the biggest party to get a seat premium

What about Macron resigning and triggering a presidential election?

Jokes aside, the pressure will certainly mount on him to resign to break the deadlock

But we are not there yet

And ultimately he's the only one who can make that call.

So this leads us back to insanity. Doing the same thing. Maybe with slight variations

And hope to squeeze some kind of budget before New year's eve.

It won't be glorious. I'll probably have to write another thread in the next 8 months but it'll do for now

Some quick additional thoughts:

France's parliament is cut roughly in 3

But what isn't helping is that these 3 blocs are subdivided in more parliamentary groups than ever before in the 5th Republic!

We are becoming the Netherlands (but with better food).

Le Pen was happy to play the even-handed stateswoman for a while

But with her being ruled out from running in 2027 over embezzlement if she stands as an MP in an early election it could get her case into the hands of the constitutional court early!

I'll keep covering the story as it emerges.

I have a long-form piece coming out tomorrow explaining the root cause of France's fiscale disaster so stay tuned!

In the meantime I'd greatly appreciate it if you could share this thread.

Merci à vous

https://x.com/Valen10Francois/status/1965116084627132502