French President Emmanuel Macron arrives at the Stade de France ahead of the Closing Ceremony of the Paris 2024 Olympic Games at the Stade de France on August 11, 2024 in Paris, France.
Tom Weller/Voigt | Getty Images Sports | Getty Images
The so-called “Olympic political truce” declared by French President Emmanuel Macron in late July is nearing its end, bringing renewed attention to the country’s unstable political situation.
President Macron’s elections, held in early July just before the world’s biggest sporting event was to be held in Paris, left parliament in limbo with no party or coalition winning a majority. The left-wing New Popular Front coalition won the most seats, preventing a much-talked-about victory for the far-right National Rally.
But over the past few weeks, the nation has been largely united by the spirit of sport.
Gone is the usual stream of bickering between politicians from all walks of life; “Interim” Government It remains in place in name only: The next nine-month session of Parliament is not scheduled to begin until Oct. 1.
Macron plans to remain president until his term expires in 2027, despite having spent much of his domestic political capital on his Renaissance party’s disastrous electoral defeat.
Prime Minister’s Race
One key question now back on the agenda is who Macron will appoint as prime minister to lead the French government, appoint ministers and push through legislation, following the resignation of his ally Gabriel Attal.
Macron has kept his thinking private and has not commented on Lucy Castets, the little-known candidate nominated for prime minister by the New Popular Front after a fierce debate.
While anyone could theoretically be appointed prime minister and there was no obligation to choose a candidate from the party with the most seats, an unpopular candidate could be ousted by a parliamentary vote of no confidence. Macron cannot dissolve the National Assembly and call new elections for another year.
Elsa Clara Massoch, assistant professor of international political economy at the University of St Gallen, said the situation was “unprecedented” and that the level of division in the new parliament could lead to “stalemate”.
“While Macron did not have an absolute majority in the last parliament, he still has a majority over the left and can count on the support of the Conservatives, who cannot tolerate censorship motions,” she told CNBC in an email.
She highlighted the issues, including the fact that: The New Popular Front’s 178 seats are well short of the 289 seats needed for a majority, and its candidate, Castets, is likely to be rejected by other parties.
Meanwhile, Macron’s own policies and coalition government are “widely rejected by the French people,” Massoc added, and no party would join forces with the far-right Rally National. Parties within the left-wing group are also divided, with some refusing to form any coalition with centrists, Massoc said.
One outcome would see right-wing Republicans prepared to form a “passive majority” with centrists, but opposition in Congress would remain strong as Republicans seem reluctant to lose their “remaining distinctiveness,” Massock added.
With approval of the 2025 budget looming, the question remains as to how such a divided parliament will agree on the bill. They decided to use special constitutional powers to pass next year’s spending bill.
There is also likely to be fierce debate over how or whether action should be taken to address France’s huge debt, and whether key policies of Macron’s government, such as raising the retirement age, can or should be reversed.
Massoc noted that parliament has relatively little power in the French political system, with 65% of bills adopted between 2017 and 2022 proposed by the government rather than parliament.
From a market perspective, France 40 Canada The index has fallen more than 4.5% since the July 7 election results, but analysts say a divided Congress could actually lead to stability for stocks and bonds because it is likely to block some parties from implementing their more populist policies.
Political parties have their eyes firmly set on the 2027 presidential election, in which Macron cannot run, and few will want to take on the responsibility of cutting public spending to close the budget deficit, Renaud Foucard, a senior lecturer in economics at Lancaster University, told CNBC in a phone interview.
For now, uncertainty reigns and Macron’s strategy seems to be to drag things out for as long as possible, he continued.
From a personal perspective, Foucard said Macron would be content to be a “lame duck” leader at home but to take a more international perspective and continue to influence European politics.
“His projects, including labor market reform and deregulation of the economy, are basically finished. He just did what he wanted to do,” he continued.
Mujtaba Rahman, Eurasia Group’s managing director for Europe, said in a note on Monday that Macron has experienced both failures and successes but has received little credit for his achievements at home, such as reducing high unemployment.
The left focuses on tax cuts for the wealthy and “attacks on France’s welfare state,” while the right points to high immigration numbers and violent crime rates, he said.
Macron also ultimately “failed to sell the majority of French voters his vision of a stronger France in a stronger Europe,” Lerman said.
“Seven years ago, Macron vowed to lead France beyond the sterile alternation of left and right to the promised land. Instead, he has plunged the country into a political quagmire with an unstable government, record budget deficits and $3 trillion in debt. [euros, or $3.28 billion] We have accumulated debt,” Rahman said.
Disclosure: CNBC’s parent company, NBCUniversal, owns NBC Sports and NBC Olympics, which holds the U.S. broadcast rights to all Summer and Winter Olympic Games through 2032.
