French Political Turmoil Hits Markets Amid Barnier's Crisis

French stocks fell and the euro dropped amid political tensions as opposition parties prepared a no-confidence motion against Prime Minister Michel Barnier. This follows Barnier's attempt to push a social security bill through parliament without a vote, leading to increased political and economic stress in France.

French stocks saw a sharp downturn on Monday as political tensions deepened with opposition parties readying to vote against Prime Minister Michel Barnier in a no-confidence motion. The sell-off in French assets was accelerated by his decision to push a social security bill through parliament without a vote.

The leftwing and far-right National Rally parties announced plans to remove Barnier, putting his minority government at risk of collapse. This political instability led to a 0.6% fall in the CAC 40 index, and the euro diving 1% against the dollar, marking a significant one-day drop.

The market volatility underscores the growing economic and political pressure within France, exacerbated by Marine le Pen's ultimatum on Barnier's budget proposal. Amidst the turmoil, borrowing costs surged, with yields on French bonds rising sharply, posing a considerable concern for the country's financial stability.

(With inputs from agencies.)