France Faces Political Turmoil as Macron Prepares to Appoint New Prime Minister

French President Emmanuel Macron announced plans to appoint a new prime minister in the coming days following the resignation of Michel Barnier, whose tenure as the shortest-serving prime minister in modern French history ended abruptly on Thursday. Barnier stepped down after lawmakers voted against his fiscal plans, plunging France into a political crisis just three months after his appointment.

In a televised address, Macron emphasized that the incoming prime minister’s primary focus will be securing parliamentary approval for the 2025 budget. To avoid a financial void, Macron stated that a temporary law extending the 2024 budget will be introduced by mid-December. A comprehensive budget, adjusted for inflation, will be prepared early next year for parliamentary approval.

A Divided Parliament and Mounting Challenges

Macron, whose snap election gamble in June resulted in a deeply divided parliament, deflected responsibility for the current crisis. He accused far-right and left-wing parties of forming an "anti-republican front" to unseat Barnier and disrupt governance. Despite opposition calls for his resignation, Macron firmly declared his intention to serve his full term, which ends in May 2027.

"The mandate you have given me is for five years, and I will fulfill it to the very end," Macron asserted.

The president’s weakened political position raises questions about the viability of his centrist agenda in a fractured parliament. The next government will need to address pressing fiscal challenges, including curbing France’s growing deficit, while navigating a polarized political landscape.

Key Milestones Amidst Uncertainty

It remains unclear if a new government will be formed before the highly anticipated reopening ceremony of Notre-Dame Cathedral on Saturday, an event symbolizing France's resilience after the devastating 2019 fire. World leaders, including U.S. President-elect Donald Trump, are expected to attend.

Highlighting France’s recent achievements, such as the restoration of Notre-Dame and the successful Paris Olympics, Macron sought to project a sense of national capability and pride. "These are proof that we can achieve great things, even the impossible," he said.

Meanwhile, speculation about Barnier’s successor has centered on figures such as François Bayrou, a prominent centrist whose name has been floated in French media. However, no confirmation has been made, and Bayrou’s camp has remained silent on the matter.

Financial Markets and Economic Implications

The political upheaval sent ripples through financial markets, with French bonds and stocks rallying briefly on Thursday in what analysts described as profit-taking after Barnier's widely anticipated ousting. However, this relief is expected to be short-lived due to the prolonged uncertainty surrounding France’s fiscal direction.

"Until potential new elections, ongoing political instability is likely to maintain an elevated risk premium on French assets," analysts at Société Générale noted. The earliest possible date for parliamentary elections would be in July, further extending the period of unpredictability.

Credit rating agency Standard & Poor’s warned that the government’s collapse complicates efforts to reduce France’s fiscal deficit, increasing the likelihood of less stringent financial measures than previously planned.

As Macron prepares to name a new prime minister, the political and economic challenges ahead underscore the complexities of governing a deeply divided nation.