French PM Sébastien Lecornu tries to avert new election as political crisis continues | BBC News

Key Concepts

• Political Crisis: Ongoing instability in French government formation.
• Sebastian Lonu: Outgoing French Prime Minister, resigned after 26 days.
• President Emmanuel Macron: Facing significant political challenges and pressure.
• Budget Deadline: Urgent need to finalize a national budget by December 31st.
• Pension Reform: A highly contentious policy, a key demand of the left for suspension, and a symbolic issue for market confidence.
• Dissolution of Parliament: The act of dissolving the legislative body, potentially leading to fresh elections.
• Three-Way House: A fragmented parliament resulting from the July 2024 election, preventing a stable majority.

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Current Political Crisis and Prime Minister's Role

France is grappling with significant political instability, marked by the recent shock resignation of Prime Minister Sebastian Lonu. Lonu announced his resignation on Monday, just 26 days into his tenure and hours after naming his cabinet. This makes him the third prime minister to resign since December last year, highlighting an immense political headache for President Emmanuel Macron. Some parties are advocating for fresh elections and for President Macron to step down.

Lonu has been tasked by President Macron with resolving this crisis, with a deadline set for today. He is currently briefing President Macron on the outcome of his discussions with various party leaders aimed at forming a new government.

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Negotiations and Budget Deadline

Speaking recently, the outgoing Prime Minister Sebastian Lonu indicated a willingness among parties to finalize a national budget by the end of the year (December 31st). He stated that the possibility of a dissolution of parliament was becoming "more remote."

Lonu emphasized the urgency: "We really have to get out of this situation. This will to find a budget by the 31st of December by this year forces us to uh to move forward and to have some municipal elections that take place in in the best circumstances. the the left the Republican left. I've spoken to them to see what what they what concessions they are willing to make so that we can get out of this situation. And before the end of this year, we really need to get oursel our house in order."

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Strategic Positioning and Market Reassurance

Paris correspondent Hugh Scoffield explained that Lonu's statements aim to put a "positive spin" on the situation, implying an agreement is within reach. This is a strategic move to:

• Reassure international markets that France's political situation is stable or stabilizing.
• Protect President Macron, who is under increasing attack.
• Create momentum towards a deal, potentially pressuring reluctant parties to cooperate.

Scoffield cautioned against taking Lonu's statements at face value, noting they are designed to create an effect.

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Key Sticking Point: Pension Reform

A central issue in the current negotiations, particularly with the socialist camp, is the suspension of the famous pension reform. This has been a long-standing demand of the entire left, including the moderate socialist party.

The question remains whether such a suspension is acceptable to President Macron, the markets, and centrists generally. Scoffield suggests that any solution avoiding a dissolution of parliament would likely involve "some give towards the left on the issue of pensions but falling short of an absolute suspension of that key reform."

The pension reform is seen by markets as a "symbolic sign of France's ability to reform." If this reform, which took "so many years of struggle to get through," were to be dropped as part of a deal, the "rejection of the markets will be massive," sending a "very very negative sign indeed."

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Underlying Causes of Instability

The current political deadlock stems from the July 2024 election, which resulted in a "three-way house" in parliament. This fragmented outcome means that no stable government can easily emerge, leading to a succession of failed governments and prime ministers.

The difficulty in passing a budget, a recurring problem, revolves around fundamental disagreements on "questions of spending and raising money that the country and politicians divide." Finding consensus on how national funds should be allocated and raised is the core of the ongoing political headache.

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Conclusion and Outlook

France faces a critical juncture, with the outgoing Prime Minister Sebastian Lonu attempting to broker a deal to form a stable government and pass a budget by year-end. The immediate challenge is to navigate the demands of various political factions, particularly the left's insistence on suspending pension reform, without alienating financial markets that view the reform as crucial for France's economic credibility. The outcome remains uncertain, with the day's negotiations, especially with the socialists, being pivotal in determining whether a compromise can be reached or if the political instability will deepen.