Yahoo Finance Macron Seeks Broad Majority to Shut Out Far Left, Far Right
(Bloomberg) -- President Emmanuel Macron called on parties that represent “republican forces” to build a broad majority from the political center after snap elections left France with a divided parliament and no obvious path toward a stable government.
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In his first substantive statement on the deadlock caused by his surprise decision to call the ballot, Macron said that although the far right won the first round with almost 11 million votes, “you clearly refused to let them enter government.” His definition of appropriate parties also de facto excluded the far-left France Unbowed.
“I call on all political forces that recognize themselves in republican institutions, the rule of law, parliamentarianism, a European orientation and the defense of French independence, to engage in sincere and loyal dialog to build a solid majority, necessarily diverse, for the country,” Macron said in a letter published in France’s regional press on Wednesday.
He acknowledged that the elections had demonstrated “a clear demand for change and for power-sharing” and so obliged such political groups “to build a broad-based partnership.” He said he’d wait to name a prime minister in order to give the discussions a chance to bear fruit.
The hurdles to any progress were laid bare on Thursday, however, as opposing forces dug into their positions. The far-left France Unbowed insisted the new premier must come from a leftist alliance that won the most seats, while the conservative Republicans pledged to bring down any left-wing government with a no-confidence motion.
Macron isn’t currently in France, having gone to meet with other NATO leaders at the military alliance’s summit in Washington. He left behind a cacophonous group of self-appointed candidates vying to become prime minister after Sunday’s second round produced a complex split in the National Assembly that sets the stage for very un-French deal-making to try to form a lasting governing coalition.
While the New Popular Front — which includes France Unbowed, the Socialists, the Greens and the Communists — has the most lawmakers in the lower house of parliament, it’s around 100 seats short of an outright majority in the 577-seat lower house. No other parties, including Macron’s, have any clear path to a majority either.
The split parliament has left Macron in the role of potential kingmaker. While it appeared that he might look either to the center-left or to the center-right to try construct a workable government with enough members to survive, he instead appears to be trying to court both at the same time in an effort to forge a majority. It’s a gambit he tried in 2022, though it didn’t work for him then.
Mathilde Panot, who leads France Unbowed in the National Assembly, said Macron’s letter was “shocking” and that the president should accept that the left had won the vote. She told Franceinfo radio the leftist coalition is working on a single candidate to put forward for the post of prime minister and that Macron must nominate this person.
“We have a democratic result,” she said. “It’s not possible to change the rules when the result doesn’t suit you.”
Bruno Retailleau, the leader of the Republicans in the Senate, called instead for Macron to pick a neutral premier from outside the National Assembly, warning that if a candidate is chosen from the New Popular Front, his party would launch a motion of no-confidence to try to bring down the government.
What Bloomberg Economics Says...
“With no government — and none seemingly imminent — the policy outlook for France remains unsettled. Even so, it’s a lot less hazy than it was before the vote. That’s because the possibility of extreme fiscal policies being implemented by the far-left or the far-right has been taken off the table.”
—Jamie Rush and Eleonora Mavroeidi. Click here for full INSIGHT.
As jockeying intensifies, Bank of France Governor François Villeroy de Galhau warned on Thursday that the country can’t afford to keep increasing the deficit or burden companies with more taxes and costs, highlighting the uncertainty created for the economy by the political drama.
“As we exit the inflation shock, unfortunately there’s another shock threatening – an uncertainty shock,” he told Franceinfo radio. “Business leaders are telling us they are worried about the wait-and-see approach of their customers who are choosing to save instead of spend, about delay of investment, and about freezing hiring.”
Macron said in his letter that the current government will continue to operate in the interim, and work is continuing. Finance Minister Bruno Le Maire sent 2024 spending limits to ministries on Thursday and said he has instigated technical work on next year’s budget.
“It is my responsibility to ensure the continuity of the state and prepare a budget for the beginning of August at the latest,” he said in Le Figaro newspaper. “It will be the responsibility of the next government to validate these options or not.”
--With assistance from Gaspard Sebag and James Regan.
(Updates with comments from political parties starting in ninth paragraph, updates with comments from Bank of France governor and finance minister starting in 14th paragraph.)
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