France risks deadlock after Macron hands over suspended parliament

  • Macron’s camp fails to win absolute majority in parliament
  • Will now seek alliances with other parties
  • Risk of political paralysis in the absence of agreements

PARIS, June 20 (Reuters) – President Emmanuel Macron faced calls for his prime minister to resign on Monday and doubts loomed over his ability to govern decisively after his side lost its parliamentary majority.

Macron’s centrist group is under pressure to win the backing of its rivals to save Macron’s reform agenda after weekend elections resulted in a hung parliament. If this fails, France could face a long period of political paralysis.

Macron will invite all political parties capable of forming a group in the new parliament for talks on Tuesday and Wednesday, a source close to Macron said on Monday.

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The loss of the absolute majority of his Ensemble alliance is a painful setback for Macron, who won a second term just two months ago. French governments have long relied on a lower house of parliament that shares their political line and broadly approves of proposals.

“We have to think about a new mode of operation at the institutional level,” European Affairs Minister Clément Beaune, close to the French president, told LCI television.

Sunday’s run-off vote left Together as the largest party, with a nascent left-wing alliance in second place, the far-right stronger than ever and the Tories as potential kingmakers. Read more

“It’s going to be complicated,” government spokeswoman Olivia Grégoire told France Inter radio. “We’re going to have to be creative.”

Macron must now either form a broader coalition or agree to lead a minority government that negotiates with opponents bill by bill. Its only consolation: the opposition groups are themselves fierce rivals and sometimes torn by internal dissension.

“Such a fragmented parliament is likely to lead to a political stalemate, with a much slower reform agenda,” Barclays’ Philippe Gudin said.

“This will likely weaken France’s position in Europe and endanger the country’s fiscal situation, which is already weak.”

Far-right and far-right figures have demanded the resignation of Prime Minister Elisabeth Borne after just over a month in power.

Grégoire said Macron would soon reshuffle his government.

AND NEXT?

The broad left-wing Nupes alliance of Jean-Luc Melenchon and far-right Marine Le Pen has vowed to harass Macron and his administration relentlessly in parliament.

One of the key questions is whether Macron will try to strike a deal with the conservative Les Républicains (LR) or take the path of minority government.

Republican leader Christian Jacob said the party would remain in opposition. But while he described the position as “almost unanimous”, some senior members said the party should cooperate with the government and act as a kingmaker.

Together and the Conservatives have compatible economic platforms, including support for a higher retirement age and nuclear power. Together they would have an absolute majority.

FIRST TESTS

Some cracks appeared on the left.

While Melenchon said Borne should face a vote of confidence, Socialist leader Olivier Faure, another senior left-wing alliance official, said calling for Borne’s impeachment was not the position. commune of the block for the moment.

If Macron fails to strike a deal with the opposition, the eurozone’s second-largest economy will face political stalemate and a possible snap election.

A major first test will be a cost-of-living bill which Gregoire said the government will introduce in eight days when the new parliament sits for the first time.

Renewable energy proposals due later this summer will test the nuclear-divided left.

Final figures showed Macron’s centrist camp won 245 seats – well below the 289 needed for an outright majority, Nupes 131, the far right 89 and Les Républicains 61.

Macron himself has yet to comment on the election result and the opposition has urged him to break his silence.

While the weekend’s vote was a bitter setback for the 44-year-old president, whose victory in April made him the first French president in two decades to secure a second term, financial markets largely accepted the result . The euro and equities showed little impact, while French bonds came under increasing pressure on Monday.

“The hope that some forex traders placed in Macron in 2017 evaporated some time ago, so that election wins or defeats no longer play a major role for euro exchange rates,” he said. Commerzbank analyst Ulrich Leuchtmann in a note.

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Additional reporting by Leigh Thomas, Myriam Rivet, Julien Ponthus, Elizabeth Pineau, Richard Lough, Benoit Van Overstraeten, Tassilo Hummel; Written by Ingrid Melander; Editing by Catherine Evans and Tomasz Janowski

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