Increasing turmoil in Paris: aftermath of the collapse of the administration

France is navigating through uncertain waters following the collapse of its center-right government, led by Prime Minister François Bayrou, after barely nine months in office. This is the second time a prime minister in a row has fallen, causing a heavy defeat for President Emmanuel Macron, who appointed the prime minister.

The vote of no confidence, called by Premier Bayrou in the National Assembly, resulted in the government's downfall. Macron is expected to keep the cabinet in office on a caretaker basis until a successor is found. After submitting his resignation, Prime Minister Bayrou must now step down.

The political paralysis could make Germany the most important partner for Ukraine, as the USA is increasingly withdrawing from supporting Ukraine. France has been a key supporter of Ukraine, providing military aid, financial assistance, and training programs for soldiers. Since 2022 until the end of June 2025, France has allocated around 7.6 billion euros for Ukraine, which is approximately 0.3 percent of its gross domestic product.

The fall of the government does not have any directly stated impact on France's finances at this point. However, the repayment of debts could become the largest budget item, even before education or defense, according to the prime minister. France has the highest debt ratio in the eurozone after Greece and Italy, with its public debt recently reaching around 114 percent of GDP.

Finding a new prime minister is likely to be another difficult balancing act due to the three major forces - Macron's center block, the left-wing camp, and Le Pen's right-wing nationalists - without their own majority in the lower house. The next step in the French government reshuffle is that President Emmanuel Macron will accept Prime Minister François Bayrou's resignation and appoint a new prime minister within the following days. The new prime minister will likely come from the largest parliamentary group, currently the left-green alliance, although Macron has so far resisted appointing a prime minister from that camp.

If all efforts to find a prime minister fail, it is still conceivable that the French will be called back to the ballot box. The European Commission has initiated a penalty procedure for excessive new debt and is concerned that the situation could worsen due to the political instability. Federal Chancellor Friedrich Merz may take on more responsibility in Europe due to the further weakening of Macron.

The political instability in France could also lead to a delay and weakening of austerity efforts, which could have negative effects on the interest burden of new government bonds and the French economy. The draft budget presented by Bayrou aimed to initiate a course change in France's galloping public debt.

As France faces uncertain times, the domestic political debates and repositioning resulting from a government change could delay budget plans and push foreign policy, including Ukraine aid, into the background. Theoretically, Macron could dissolve the National Assembly again and call new elections, but he has repeatedly made it clear that he does not want to resort to this means.

In the midst of these challenges, France continues to be a crucial player in European and global politics, and its future direction will be closely watched by allies and adversaries alike.