Emmanuel Macron, President of France, arrives at the Stade de France stadium before the Closing Ceremony of the Paris 2024 Olympic Games at the Stade de France stadium on August 11, 2024 in Paris, France.
Tom Weller/voigt | Getty Images Sports | Getty Images
Time is running out for the so-called “Olympic political truce” declared by French President Emmanuel Macron in late July, bringing the country’s turbulent political landscape back into perspective.
The extraordinary legislative election called by Macron in early July — just before Paris hosted the world’s biggest sporting event — leading to a hung parliamentNo party or coalition won a majority. The left-wing New Popular Front coalition won the most seats and prevented a much-discussed victory for the far-right National Party.
However, over the past few weeks, the country has been united by the spirit of sportsmanship.
The usual stream of arguments from politicians across the spectrum has dried up, and a government “management” remains in nominal order. The next nine-month session of Congress will not begin until October 1.
Macron is expected to remain president until his term ends in 2027, although much of his domestic political capital has been spent following the election defeat of his Renaissance party.
Prime Minister struggles
One of the key questions back on the agenda now is who Macron will appoint as the new prime minister – the person who leads the French government, nominates ministers and initiates legislation – after his ally Gabriel Attal resigned.
Macron has kept his details private and has not commented on Lucie Castets, the little-known candidate nominated for the position by the New Popular Front after much debate.
While he is theoretically free to appoint anyone to the post and is not obliged to choose a candidate from the party with the most seats, an unpopular choice could be rejected by a vote of no confidence in parliament. Macron cannot dissolve parliament and call another election in another year.
Elsa Clara Massoc, associate professor of International Political Economy at the University of St. Gallen, said the current situation was “unprecedented” and appeared to be heading into a “dead end” given the level of division in the new parliament.
“Under the previous legislature, Macron did not have an absolute majority but was still more than the current left and could count on the support of the Conservatives to avoid a censure move,” she told CNBC via email.
She highlighted issues including the fact that The New Popular Front’s 178 seats are still short of the 289 needed to win a majority and its candidate Castets is likely to be rejected by other parties.
Meanwhile, Macron’s policies and the coalition government have been “widely rejected by the French,” Massoc added, and no party would form a coalition with the far-right National Rally. Even within the left, parties are divided and some would reject any form of coalition with the centrists, she said.
One possible outcome is that the right-wing Les Republicains party is ready to form a “passive majority” with the center, but the former seems unwilling to lose “what remains of its particularity,” Massoc added, and opposition in parliament will remain high.
There are further questions about how such a divided parliament will agree on any legislation, with approval of the 2025 budget looming. Even in 2022, Macron have used a special constitutional power to pass the following year’s spending bill.
There is also likely to be fierce debate over how – or whether – to act to address France’s problem. huge debtand whether key Macron policies such as raising the national retirement age can or should be abandoned.
Under France’s political system, parliament has relatively little power, and between 2017 and 2022, 65% of the legislation passed was legislation proposed by the government, not parliament, Massoc noted.
From a market perspective, the French CAC40 The index has fallen more than 4.5% since election results on July 7. But analysts say A divided parliament could actually lead to more stability in stocks and bonds because it could prevent some parties from implementing more populist policies.
Renaud Foucart, senior lecturer in economics at Lancaster University, told CNBC by phone that political parties are focused heavily on the 2027 presidential race — a race Macron cannot enter — and few parties want to take responsibility for cutting public spending to address the budget deficit.
For now, uncertainty reigns and Macron’s strategy seems to be to drag things out for as long as possible, he added.
According to Foucart, on a personal level, even as a “lame duck” leader at home, Macron would probably still be happy to focus more on international issues and continue to try to influence European politics.
“His project of transforming the labor market and deregulating the economy is essentially over — he did what he set out to do,” he continued.
Mujtaba Rahman, managing director for Europe at Eurasia Group, said in a note on Monday that Macron had both setbacks and successes but did not get much credit for domestic victories, including reducing high unemployment.
He said the left focused on his tax cuts for the rich and “attacks on France’s welfare state”, while the right criticized high immigration numbers and violent crime rates.
Ultimately, Macron “failed to convey his vision of a stronger France in a stronger Europe to the majority of French voters,” Rahman said.
“Seven years ago, Macron pledged to lead France to a promised land beyond the meaningless swings of left and right. Instead, he has led France into political quicksand with an insecure government, record budget deficits and 3 trillion euros in [euros, or $3.28 billion] in accumulated debt,” Rahman said.
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