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Business|Investors Punish France Over Budget Turmoil
https://www.nytimes.com/2024/12/02/business/frances-credit-rating.html
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The country’s borrowing costs have soared over worries that a political showdown in Parliament over spending cuts and tax increases could topple a fragile government coalition.
Dec. 2, 2024, 11:41 a.m. ET
France tumbled further into financial uncertainty on Monday as the government teetered on the brink of collapse, prompting investors to sell French stocks and bonds, which has sent the country’s borrowing costs soaring.
A political showdown over France’s budget could lead to the ouster of the prime minister, Michel Barnier, as early as Wednesday, after he pushed the measure through the lower house of Parliament on Monday without a vote. Opposition parties immediately called for no-confidence vote.
Mr. Barnier’s forced departure would leave the government rudderless, raising questions about the ability of President Emmanuel Macron to manage the fallout.
France has become one of the most financially troubled countries in Europe, with an outsize debt and deficit that have grown rapidly in recent months. But efforts by Mr. Barnier’s fragile government coalition to address the problem, with a budget bill seeking 60 billion euros in savings for 2025, have become snared in a political minefield.
Last week, the French government spokeswoman, Maud Bregeon, said France was facing a possible “Greek scenario,” a reference to the financial tumult that gripped Greece during Europe’s debt crisis a decade ago.
How did France reach this point?
France’s far-right National Rally party, led by Marine Le Pen, called for a censure motion against Mr. Barnier’s government on Monday after making demands for changes to the budget bill.
