French Prime Minister Lecornu Resigns Less Than a Month into Office

French Prime Minister Sébastien Lecornu has resigned just 27 days into his tenure, the shortest in the history of the Fifth Republic, which began in 1958. His resignation comes amid significant political instability in France, marked by the dissolution of the National Assembly by President Emmanuel Macron in June 2024, which failed to establish a governing majority.

Political Turmoil in France

The resignation took place on a Monday morning, shortly after Lecornu faced criticism for his newly formed government. Describing the political environment, Lecornu stated, “The conditions were not met,” while lamenting the “partisan appetites” of political parties.

He expressed concern over the parties’ approaches, suggesting they act as if they hold an absolute majority. This predicament further exacerbates the ongoing political crisis in France, raising alarms in economic and financial circles.

Future Implications

With Lecornu’s departure, the question arises: What will President Macron’s next steps be? His options include dissolving the National Assembly as demanded by far-right factions, resigning as suggested by radical left leaders, or appointing a new Prime Minister. This potential new appointment would mark the fourth Prime Minister since June 2024 and the sixth since Macron’s re-election in May 2022.

Many political commentators, including Le Monde, highlight Macron’s isolation amid this crisis. The financial situation remains dire, with France’s debt soaring to €3,400 billion (approximately 115.6% of GDP).

Market Reactions

The immediate aftermath of Lecornu’s resignation triggered a notable market response. The CAC 40 index dropped by 1.70%, while French ten-year interest rates surged. This fluctuation widened the gap between French and German rates, which serve as a benchmark.

Additionally, the euro fell by 0.63% against the dollar, trading at 1.1688 USD per euro as political uncertainty intensified.

Coalition Challenges

• The coalition Lecornu led fractured almost immediately after its formation, declining to reflect the promised political shift.
• Bruno Retailleau, leader of the right-wing party Les Républicains, criticized the government composition and called for a party meeting.
• Contentions also arose from the reappointment of Bruno Le Maire, a symbol of recent budgetary issues, signifying continued strife within the coalition.

Marine Le Pen, leader of the far-right, has argued for the urgent necessity of another National Assembly dissolution, asserting that Macron’s resignation is essential for effective governance. Meanwhile, Jean-Luc Mélenchon from the radical left is pursuing a motion to impeach Macron.

As the political crisis unfolds, Macron faces mounting pressure amid a fractured political landscape with no party wielding an outright majority.