PARIS ¨C France¡¯s fourth prime minister in three years, Francois Bayrou faces almost certain defeat in a confidence vote on Monday, tipping the euro zone¡¯s second-biggest economy further into political uncertainty. The government¡¯s collapse looks set to deepen France¡¯s paralysis at a critical time for Europe, which is seeking unity in the face of Russia¡¯s war against Ukraine, an increasingly dominant China and trade tensions with the United States.
The turmoil also threatens France¡¯s ability to rein in its debt, with the risk of further credit downgrades looming as bond spreads ¡ª a gauge of the risk premium investors demand to hold French debt ¡ª widen. France faces acute pressure to repair its finances, with last year¡¯s deficit nearly double the EU¡¯s 3% limit of economic output and public debt at 113.9% of GDP.
The confidence vote is slated for Monday afternoon. Despite a frenzy of talks and media appearances since his decision to throw his hat into the ring on Aug. 25 amid tense debates over a budget bill, Bayrou appeared over the weekend to have failed to secure a majority.
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