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French government collapses again after nine months

Experts divided on potential impact on businesses.

French Prime Minister François Bayrou's minority government has collapsed nine months after his predecessor Michel Barnier suffered the same fate in a no-confidence vote.

On 8 September, the National Assembly in France did not approve the government's policy statement, which sought to slash next year's budget by around $51.5b (€43.8b) in hopes of fixing the country's finances. Of the 558 votes cast, 364 were against approval.

The vote will see Bayrou resign on 9 September. Last December, a similar vote of no confidence resulted in Barnier's exit just after three months.

It's unclear how the current political instability will impact businesses, with experts looking from different half-glass perspectives.

Patrick Martin, president of the Mouvement des Entreprises de France, believes the country risks entering a recession amidst the uncertainty, as reported by Euronews Business. His assertion was made in late August, ahead of the vote. He cited job destruction and a freeze in investments as some of the immediate effects of political turmoil.

Meanwhile BCA Research's Jérémie Peloso is of the view that any consequence will not be as grave as feared.

"It would have a very limited impact on economic activity beyond political uncertainty and a hit to consumer and business confidence," Peloso told Euronews Business. "But even there, I suspect the impact will be limited."

A new prime minister will be appointed by President Emmanuel Macron in the coming days.

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