In France, another political crisis suggests that neither the current nor a new government is likely to implement forceful measures to curb fiscal vulnerabilities, which will increase the risk of financial instability, reduce domestic investment and weigh on France's other financial commitments in the coming years. On Sept. 8, Prime Minister Francois Bayrou will face a confidence vote, which he is expected to lose, as his minority government struggles to gain sufficient legislative support for its 2026 budget that includes 44 billion euros ($51 billion) in cuts and other controversial measures, including scrapping two public holidays. Faced with a continued increase in government debt, which exceeds 100% of GDP, successive French governments, depending on the support of an increasingly fragmented and polarized legislature, have failed to implement significant fiscal adjustment. Michel Barnier was ousted as prime minister in December 2024 after trying to push through spending cuts using a constitutional...
