Budget Brinkmanship: Barnier's Government on the Edge

French Prime Minister Michel Barnier faces a political crisis as Marine Le Pen demands budget concessions. Le Pen threatens a no confidence motion unless Barnier agrees to RN budget demands. Failure to reach an agreement could trigger government collapse and financial instability in France.

France's Prime Minister Michel Barnier is on the brink of a political crisis, with National Rally lawmaker Marine Le Pen demanding significant budget concessions. Le Pen has issued an ultimatum to Barnier: meet the RN's demands by Monday or face a potential no confidence motion that could topple his government.

Barnier recently scrapped a planned electricity tax hike but remains at odds with the RN over pension adjustments and potential tax increases on gas. There's also discontent over France's contribution to the EU budget. The standoff intensifies as Barnier may have to employ his constitutional powers to push through a vital social security financing bill, risking the no-confidence vote.

The unfolding budget impasse is causing unease in financial markets, with French debt and stocks feeling the pressure. Finance Minister Antoine Armand warns of emergency legislation if no agreement is reached. The looming uncertainty casts doubt on France's ability to meet its deficit-reduction targets, despite S&P maintaining its AA- rating on French debt.

(With inputs from agencies.)