French President Emmanuel Macron is facing another political crisis after his newly appointed prime minister, Sébastien Lecornu, resigned just 27 days into the job. Lecornu’s departure came after he unveiled a largely unchanged cabinet, sparking fierce criticism across the political spectrum.
The shock resignation has sent shockwaves through financial markets, with French borrowing costs surging and the country’s stock market tumbling. Yields on French 10-year government bonds jumped as much as 11 basis points to 3.61%, reflecting growing investor concerns about France’s ability to rein in its ballooning deficit.
Analysts warn that the political turmoil is making it “nearly impossible” for France to pass a budget that reduces its fiscal deficit, which is projected to remain above 5% of GDP next year. Jack Allen-Reynolds of Capital Economics said the “fractured parliament” is hampering efforts to restore order to public finances.
The crisis deepens Macron’s political woes, with the president now facing the prospect of appointing a fourth prime minister in less than a year. The hard-right National Rally party has already called for snap parliamentary elections, sensing an opportunity to capitalise on the government’s instability.
Macron has asked Lecornu to hold final talks with political parties by Wednesday evening to try to define a platform for action and stability. But with the country’s borrowing costs soaring and the stock market in freefall, the president is running out of options to avert a full-blown crisis.
