European institutions in Brussels are paying attention not only to the financial discussions but also to the political challenges that are unfolding in France.
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00:00The European Union has its eyes on the French National Assembly. Prime Minister Michel Barnier's
00:10coalition government is likely to be in its final hours and the issue is the budget. Barnier
00:17is proposing a major effort to reduce the public deficit, estimated at 6.1% this year,
00:23down to 5% by 2025.
00:53Michel Barnier is under national and European pressure to bring France back into line with
01:02the Stability and Growth Pact. He is therefore proposing a 60 billion euro effort, comprising
01:0940 billion euro in spending cuts and 20 billion in additional revenue. However, it is not
01:16so much the budgetary uncertainties that are worrying the markets, but the political impasse.
01:23If the Barnier government falls, we don't know if Mr. Macron is going to keep Barnier
01:30for a while, if he is going to put in another prime minister, if he is going to resign.
01:37There are quite a few people who are calling for his resignation in France in 2025. That
01:42means a presidential election, a legislative re-election, probably in the summer. So that
01:49means we are in for a whole semester of political speculation, campaigning, etc. where France
01:58will be out of the game.
02:02This political instability in France will weigh heavily in European debates. The voice
02:07of Paris risks being weakened at a time when the Union's new institutional teams want to
02:12make rapid progress on the geopolitical, industrial and climate challenges facing the 27 member
02:18states.