Budget will be a major test for new French government

Significance Barnier says he will appoint his cabinet next week. The cabinet must be then approved by parliament. Barnier’s government will not have a parliamentary majority and will depend on the far-right National Rally (RN) to implement legislation and survive censure motions. Impacts Persistent political uncertainty will continue to undermine investor confidence in the economy. If Barnier’s government collapsed early, the chances of presidential elections before 2027 would increase substantially. Barnier’s government will likely be supportive of the EU’s tariffs on Chinese electric vehicle imports.