The role of Prime Minister of France has a higher turnover rate than the Defence Against the Dark Arts teacher at Hogwarts. Yesterday, Sébastien Lecornu became the fourth French PM to resign in 13 months—after just 26 days on the job.
He bid adieu less than a day after naming his cabinet, following protests from parliamentarians across the political spectrum over the inclusion of several ministers from the government that collapsed last month. In a Hail Mary, French President Emmanuel Macron gave Lecornu until Wednesday for last-ditch talks with opposing lawmakers to find a way forward.
It’s all about debt
Macron tapped his close ally Lecornu to form a government hoping it’ll pass a contentious belt-tightening budget as the country faces ballooning debt. The budget deficit hit 5.8% of GDP in 2024, the highest it’s been since World War II.
Investors recoiled at the folding of the crew that was supposed to shore up French finances:
France’s CAC 40 stock index closed down 1.4% yesterday.The difference between French and German bond yields—a proxy for how risky investors believe a country’s debt to be—rose to one of the highest levels it’s been in several years.
If Lecornu’s talks fail…Macron would have to find yet another PM, call a snap parliamentary election, or resign.—SK