France faces ‘monetary disaster’ after surprising election, minister says

France‘s outgoing finance minister has declared the nation is facing the prospect of an ‘immediate financial crisis’ after the government was left in deadlock following tumultuous parliamentary elections on Sunday. 

Bruno Le Maire celebrated the loss of the hard-right National Rally (RN) party, which Emmanuel Macron‘s centrists had feared could storm to a majority, but warned warring parties must come to an agreement and form a coalition in short order.

He also lambasted the tax-and-spend economic policies set forth by the left-wing New Popular Front (NFP) alliance, which took a surprise election victory but fell well short of a majority, plunging the French government into chaos less than three weeks before the Olympic Games in Paris. 

These include huge increases in minimum wage and public sector pay, a reduction of the pension age from 64 to 60 and a freeze on the prices of essential goods.

The NFP say their policies will cost some €150 billion over three years and have proposed a 90% tax on all incomes over €400,000 as just one way of balancing the books. 

But Macron’s camp warned it could cost as much as €300 billion – and France is already grappling with a budget deficit of 5.5% of GDP. 

‘The most immediate risk is a financial crisis and France’s economic decline,’ Le Maire said.

‘The application of the New Popular Front’s disruptive programme would destroy the results of the policies that we have pursued for seven years… 

‘This project is exorbitant, ineffective and dated. Its legitimacy is weak and circumstantial. It must not be applied,’ he concluded.

Defying the predictions of political experts, French polls and the world’s media, the New Popular Front alliance (NFP) – led by Jean-Luc Melenchon and his France Unbowed party (LFI) – came from behind on Sunday to eke out a victory with 182 seats in France’s National Assembly.

That placed them just ahead of President Macron‘s centrist ‘Together’ coalition on 168, while the hard-right National Rally (RN) ended up in third place with just 143 seats, despite having led the race convincingly after the first round of elections just one week ago. 

This means the overwhelming majority of seats are now split fairly evenly between three factions, all of which harbour very different ideas about the future of France with little interest in forming a coalition. 

Melenchon – a permanent fixture of the French left and a divisive firebrand dubbed the ‘French Jeremy Corbyn’ – has declared the NFP must be given the reigns so it can begin implementing its policies.

‘The president must invite the New Popular Front to govern,’ he said, characterising the election results as a damning indictment of Macron and his centrist party. 

But his hopes of personally dragging France sharply leftward appear dead in the water after members of Macron’s party ruled out forming a coalition with what they see as a tax-and-spend, pro-Gaza figure who many in France view as an antisemitic radical.

Former Prime Minister Edouard Philippe, who is seen as a possible Macron successor in 2027, said any potential coalition government ‘cannot be the work of a single man’ and dismissed any prospect of working with Melenchon’s hard-hard left LFI, or the hard-right RN.

‘The credibility of our country could be damaged by this and the centrist political forces must without compromise make an agreement to stabilise politics – but without France Unbowed and the RN,’ he said.

Even leading members of Melenchon’s own alliance have admitted they do not think he is the right man for the job. 

Socialist leader Olivier Faure claimed Melenchon ‘is the most divisive figure within the NFP,’ while one Greens party lawmaker speaking on condition of anonymity said bluntly: ‘Melenchon is a problem.’

While France’s political factions continue to squabble with no immediate prospect of a stable coalition, Macron is seeking to capitalise on the chaos.

Yesterday, the President refused the resignation of his protégé Prime Minister Gabriel Attal and instructed him to stay in place as the government sits in limbo to continue presiding over the day-to-day management of the country. 

Macron will be hoping that Attal remaining in his post will portray his centrist ‘Together’ alliance as a stabilising force, and that the Prime Minister will help to maintain some kind of political continuity as Paris gears up to host the Olympic Games at the end of the month. 

But the president has given no further indication as to what his next move may be.

In a sign of rising tensions between the left and the Élysée Palace, LFI president Manuel Bompard suggested that Macron was trying to defy the will of the people by maintaining Attal.

He urged Macron to ‘respect’ the election result, adding: ‘There is no question of Gabriel Attal’s contribution as Prime Minister, wiping out the vote of the French people.’

Macron’s supporters have a very different view of the election, which they said ended inconclusively.

Gerald Darmanin, Minister of the Interior of France, said ‘No one won’ and claimed that both the Rally and the NPF ‘had lost’.

Sylvain Maillard, an MP with Macron’s group, said the search for a new prime minister could take ‘several weeks’.

‘The French people have chosen a parliament with three blocks of roughly equal size,’ he said, adding that the centrist bloc would be open to forming a government with other MPs except those belonging to Marine Le Pen’s RN or Melenchon’s LFI.

Macron’s office has simply said the will ‘wait for the new National Assembly to organise itself’ before making decisions on a new government.

There is no firm timeline for when Macron must name a prime minister, and no firm rule that he has to pick someone from the largest party or bloc in parliament – but an ongoing political paralysis would spell disaster for the nation. 

Under France’s Constitution, he still holds power over foreign policy, European affairs and defence, and is in charge of negotiating and ratifying international treaties. 

The president is also the commander-in-chief of the country’s armed forces and holds the nuclear codes.