Michel Barnier faces a no-confidence vote on budget measures

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French Prime Minister Michel Barnier’s government faces a vote of no confidence from Wednesday after he began pushing for a budget without parliamentary approval.

Barnier Article 49.3 of the French constitution on Monday will attempt to pass the first phase of its €60bn tax hike and spending cuts. They lack a majority in the National Assembly.

Immediately after the move, Marine Le Pen vowed that her Rassemblement National party would vote to remove the prime minister, potentially bringing down Barnier’s government.

France’s far-left party Unbowed also confirmed it would present a no-confidence motion in the coming hours.

Le Pen criticized Barnier for not heeding his party’s demands to protect French citizens from social security measures that he says would harm their purchasing power.

“The French have had enough,” he said. “Maybe they thought with Michel Barnier that things would get better, but they got worse.”

Article 49.3 allows the government to bypass parliament to enact legislation, unless it can survive a vote of no confidence.

Barnier defended his decision and called on French lawmakers not to plunge the country into trouble.

“We have reached the time of truth . . . “Now it is up to members of Parliament to decide whether our country will get a reliable, necessary budget or if we will enter an uncharted territory,” he said.

“I have gone to the end of negotiations that have been achieved with all political parties, always being open and listening.”

The differences between budgeting methods has roiled French markets in recent weeks, briefly pushing Paris bond yields above those of Greece and the French stock market.

French stocks fell slightly on Monday as investors reacted negatively to political fears, while the euro continued to weaken, down 1 percent at $1.047.

“Investors are worried that France will be out of control if the government falls to (a) vote of no confidence,” said Chris Turner, head of international markets at ING. He also said that the crisis was “exacerbating the problem of the Eurozone”.

The country’s sovereign bonds weakened following Barnier’s move, taking 10-year yields down 0.02 percent to 2.91 percent, while other Eurozone bonds rose.

The spread on Germany’s 10-year bond, the main risk-weighted bond, reached 0.87 percent, close to last week’s 12-year high.

If Barnier’s government were to vote this week, it would be the second time French lawmakers have done so since the Fifth Republic was founded in 1958. It would also make Barnier the longest-serving prime minister in the same period.

Barnier was shut down on Monday in the last economic talks with Le Pen. The future of Barnier’s budget and administration remained in Le Pen’s hands RN because it is the single largest party and the largest voting bloc in the assembly.

But the negotiations failed, even though Banier agreed to two of the three RN demands.

“Barnier’s game is over,” said Mujtaba Rahman of the Eurasia Group. “France is about to enter its second crisis in five months.”