French President Emmanuel Macron is unlikely to call a snap election if Prime Minister Francois Bayrou loses a confidence vote next week, according to people familiar with the matter, as he seeks to contain a political crisis that has rattled markets.
Bayrou has scheduled the Sept. 8 vote in an effort to push through contested budget cuts, but opposition parties across the spectrum have pledged to vote against him, making his ouster appear increasingly likely. Far-right leader Marine Le Pen has demanded Macron resign or dissolve parliament, but fresh elections are not currently on the agenda, the people said, asking not to be identified because the discussions are private.
Instead, Macron would attempt to broker an agreement among parties in the National Assembly to install a new prime minister capable of holding together the centrist bloc while building ties with the Socialists to advance legislation, according to the people.
Market Relief
French bond markets gained after Bloomberg reported Macron’s strategy, with the spread between 10-year OATs and German bunds narrowing by about one basis point to 78. The spread had widened sharply from around 70 after Bayrou announced the confidence vote, reflecting investor concern that political instability could undermine the $3.2 trillion economy’s fragile recovery.
Macron has warned allies that another snap election would likely produce the same fragmented parliament as last year, when his decision to dissolve the lower house backfired and left no party with a clear majority. While the president retains the constitutional authority to call a vote, he views it as a last resort, the people said.
Difficult Calculus
Should Bayrou be forced out, there is no fixed timetable for Macron to nominate a successor. After the 2024 election, it took two months to appoint Michel Barnier as prime minister, only for him to fall within three months. Bayrou’s own appointment came after more than a week of negotiations.
Macron has urged his centrist allies to seek common ground with the Socialists in order to secure passage of the 2026 budget, people familiar with the talks said. Socialist leader Olivier Faure has openly expressed interest in taking Bayrou’s role.
But cooperation would come at a cost. The conservative Republicans, who currently occupy cabinet posts, have said they would quit the government if the left gains influence. And the Socialists’ policy platform, which includes a wealth tax and rolling back the retirement age to 62 from 64, clashes directly with Macron’s pro-business agenda.
The outcome of the Sept. 8 vote will determine whether Macron can preserve stability or is forced into yet another reshuffle, underscoring the fragility of French politics less than a year after his last attempt to reset parliament.
Based on reporting by Bloomberg