Rising Tensions: French Government Faces Collapse Amid No-Confidence Motions

The French government teeters on the brink of collapse as far-right and left-wing parties file no-confidence motions against Prime Minister Michel Barnier. The political crisis has already impacted French assets and the euro, with markets reacting to the uncertain future of France’s budget approval.

The French government is facing imminent collapse after the submission of no-confidence motions by far-right and left-wing parties against Prime Minister Michel Barnier. This escalation has heavily affected French assets, deepening a political crisis in the euro zone's second-largest economy, raising doubts about budget approval.

National Rally leader Marine Le Pen remarked that the French populace is discontent with Barnier's leadership, prompting the proposed vote of no confidence. A government collapse would be the first since 1962, leaving a major void in Europe, especially with upcoming elections in Germany and the impending return of U.S. President-elect Donald Trump.

Barnier's controversial decision to push a social security bill without a parliamentary vote sparked the no-confidence motions, further unsettling markets with French bond spreads widening and the euro weakening. Barnier called for lawmakers to reject the vote, citing national interest over individual gains, but the fragile political landscape leaves his government at risk.

(With inputs from agencies.)