French Prime Minister François Bayrou failed to overcome a no-confidence vote on Monday, casting France into political turmoil as the nation struggles to contain its skyrocketing debt.

Bayrou and his minority government's 194-364 vote loss marks the fourth occupant of the prime minister's residence to be ousted in less than two years. This makes Emmanuel Macron the first French president to have two government collapses in 12 months since 1953.

The centrist prime minister initiated the no-confidence vote after facing resistance from both the right and left against his proposed austerity measures. Bayrou's budget aimed to cut €44 billion in government spending over the next three years and remove two public holidays in an effort to reduce the deficit to 4.6%.

France's debt currently sits at over 116% of the nation's total gross domestic product (GDP), with a deficit of 5.5% of GDP. The International Monetary Fund (IMF) projects these figures will swell to more than 128% and 6.1% respectively, by 2030.

These rates are more than double the acceptable European Commission limits of 60% and 3%.

"The biggest risk was not to take one, to let things continue without anything changing," Bayrou told members of parliament in an address before the no-confidence vote.

Bayrou said his plan aimed to help France "in a few years' time escape the inexorable tide of debt that is submerging it." He described the fiscal burdens the nation faces as "life-threatening."

"You have the power to overthrow the government," but not "to erase reality," he said. "Reality will remain relentless: expenses will continue to rise, and the burden of debt, already unbearable, will grow heavier and more costly."

Patrick Martin, president of Medef, France's largest business federation, warned the latest government instability could result in the "freezing of investments, loss of confidence, increased risk of bankruptcies, and job destruction."

Consumer confidence has moved lower since April, falling to 87 in August 2025, down from 88 in the previous three months and below forecasts of 90. Households grew more pessimistic about their future financial situation and continued to view conditions as unfavorable for major purchases, according to Trading Economics.

French business confidence has also trended lower since April, with the next reading on September 19.

"If businesses cannot invest, growth and jobs collapse, and France risks entering a recession," Martin said during an August 28 business conference. Jérémie Peloso, BCA Research's chief European strategist, noted he expects a smooth transition of power, believing that "French institutions are strong."

“It would have a very limited impact on economic activity beyond political uncertainty and a hit to consumer and business confidence. But even there, I suspect the impact will be limited," he said for Euronews.

Equity valuations have also taken a hit. As of September 9, the French benchmark stock index CAC 40 is up just 5.05% year-to-date. In comparison, its German counterpart, the DAX 40, is up 18.57% in the same period.

This second government collapse in less than a year may also impact France's credit rating. Global credit rating agency Fitch Ratings is due to review France on September 12.

Macron's chief rival and leader of the right-wing National Rally (RN) party, Marine Le Pen, has called for snap elections to alleviate the parliamentary stalemate. Le Pen referred to new elections as "not an option but an obligation" in an address to the lawmakers before the no-confidence referendum.

A new round of elections could see Le Pen and the RN gain more seats in the National Assembly. During the first round of June 2024 snap elections, the RN garnered more votes than any other party, and previous April polling shows Le Pen and her party have since grown in popularity.

Meanwhile, leaders on the left immediately called for Macron's resignation.

"Bayrou has fallen," head of the far-left France Unbowed (LFI) party, Jean-Luc Mélenchon, wrote on X. "Victory and relief for the people. Macron is now on the front line facing the people. He too must step down."

Socialist party leader Boris Vallaud said his party is ready to govern as Macron "has led us into this impasse."

According to an Odoxa-Backbone poll for France's Le Figaro news publication, 64% of respondents reported they would rather Macron resign instead of appointing another prime minister. Additionally, about 77% of people said they disapprove of Macron's performance in an Ifop poll for the Ouest-France daily. This marks Macron’s worst rating yet.

However, Macron has ruled out stepping down. The Elysée Palace said the president plans to appoint Bayrou's successor, the seventh to serve under Macron since taking office in 2017, "in the next days."

Justice Minister Gérald Darmanin and Minister of the French Armed Forces Sébastien Lecornu have been cited as potential replacements for Bayrou. However, either man, both right-leaning members of the current government, may find it difficult to stave off similar parliamentary challenges.

Far-left activist group "Bloquons Tout" ("block everything") has called for protests and demonstrations across Paris on Wednesday. Multiple trade unions are planning strikes on September 18.

"With nationwide protests planned for 10 and 18 September, Macron risks becoming the sole target of public anger in the absence of a functioning government," ING Think said. "The president will first try to find a prime minister who can survive a vote of no confidence. Macron’s resignation is even less likely."

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