France Faces More Turmoil With Govt on the Brink Ahead of Confidence Vote

Nation's Ability to Rein in Debt Under Threat, With Risk of Further Credit Downgrades Ahead

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PARIS — France's fourth prime minister in less than two years, Mr. Francois Bayrou, faced defeat in a confidence vote on Sept. 8, tipping the euro zone's second-biggest economy further into political and economic paralysis.

The minority government's expected collapse looks set to deepen France's problems at a critical time for Europe, which is seeking unity in the face of Russia's war against Ukraine, an increasingly dominant China and trade tensions with the US.

The turmoil threatens France's ability to rein in its debt, with the risk of further credit downgrades looming as bond spreads — a gauge of the risk premium investors demand to hold French debt — widen.

France faces acute pressure to repair its finances, with 2024's deficit nearly double the European Union's 3 percent limit of economic output and public debt at 113.9 percent of gross domestic product.

The confidence vote was slated for the afternoon of Sept. 8 after a debate that started from 3 p.m. (9 p.m. Singapore time) with an opening speech by Mr. Bayrou, followed by leaders from all political groups. The outcome of the vote was set to come by around 7 p.m.