Paris: France's benchmark stock index, the CAC 40, fell by 2% on Tuesday after the nation's three main opposition parties declared that they would not support a confidence vote called by French Prime Minister Francois Bayrou.
According to Anadolu Agency, the CAC 40 index dropped to 7,686.69 points as of 0750GMT, following a 1.59% decline on Monday. In a press conference, Bayrou revealed that he has requested the president to convene parliament for an extraordinary session on September 8. The government now faces a potential collapse if it cannot secure majority support in the confidence vote.
The primary opposition parties, including the far-right National Rally, the Greens, the left-wing France Unbowed (LFI), and the Socialists, have already announced on social media their intentions to oppose Bayrou. National Rally leader Marine Le Pen stated on X, a US social media platform, "We will obviously vote against confidence in Francois Bayrou's government. Only dissolution will now allow the French to choose their destiny."
Bayrou has expressed concerns that France is "in danger" due to being "on the brink of over-indebtedness" and is seeking parliamentary approval for measures aimed at saving nearly £44 billion ($51 billion) in the 2026 budget. His proposal includes freezing social and pension expenditures and maintaining tax bands at 2025 levels in an effort to reduce the French deficit, which stood at 5.8% of GDP in 2024, by approximately £44 billion ($51 billion).
On July 15, Bayrou presented the National Assembly with the 2026 budget plan, which is part of the government's broader strategy to reduce public debt. France's public debt ratio is currently one of the highest in the EU, at 113% of the country's GDP. Opposition MPs have criticized the proposal as an extension of stringent austerity measures, a recurring point of contention in French politics. Last year, the failure to reach an agreement on the 2025 budget led to the downfall of the Michel Barnier Cabinet in December, as far-right and left-wing parties collaborated to pass a no-confidence resolution.