"France is stuck in economic limbo, without a budget and soon, possibly, without a government. The prime minister, Francois Bayrou, has called for parliament to hold a confidence vote on 8 September and, now that parties of the left and far-right have pledged to bring the government down, on paper he doesn't have the numbers to win. On Tuesday the Socialist Party (PS) added its voice to the dissenters, allying it with the Greens and the far-right National Rally."
"In an effort to head off a no vote, the finance minister, Eric Lombard, has stated publicly that asking the global lender of last resort, the International Monetary Fund, to intervene is a risk that is in front of us. Without the Socialists, Bayrou's centre-right administration cannot survive. And there is widespread agreement among economists that Bayrou's fall will trigger further speculation about the health of the economy and the public finances. At first glance France's situation would appear to be far from dire."
France is operating without an approved budget and faces a confidence vote on 8 September after left and far-right parties pledged to bring the government down. The Socialist Party allied with the Greens and the far-right National Rally, depriving the prime minister of necessary support. The finance minister warned that asking the International Monetary Fund to intervene is a present risk. Economists agree that the government's collapse would spur further speculation about economic and fiscal health. France's debt burden remains lower than Italy's 135% and borrowing costs are below the UK's. Projections show a persistent spending shortfall pushing French debt from 113% last year toward more than 120% by decade's end.
Read at www.theguardian.com
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