French govt collapses as PM Barnier loses no-confidence vote
Paris, Dec 5 (AP): France's far-right and left-wing lawmakers joined together Wednesday in a historic no-confidence vote prompted by budget disputes that forces Prime Minister Michel Barnier and his Cabinet members to resign, a first since 1962.
The National Assembly approved the motion by 331 votes. A minimum of 288 were needed.
President Emmanuel Macron insisted he will serve the rest of his term until 2027. However, he will need to appoint a new prime minister for the second time after July's legislative elections led to a deeply divided parliament.
Macron will address the French on Thursday evening, his office said, without providing details. Barnier is expected to formally resign by then.
A conservative appointed in September, Barnier becomes the shortest-serving prime minister in France's modern Republic.
“I can tell you that it will remain an honor for me to have served France and the French with dignity,” Barnier said in his final speech before the vote.
“This no-confidence motion… will make everything more serious and more difficult. That's what I'm sure of,” he said.
Opposition to Barnier's proposed budget
Wednesday's crucial vote rose from fierce opposition to Barnier's proposed budget.
The National Assembly, France's lower house of parliament, is deeply fractured, with no single party holding a majority. It comprises three major blocs: Macron's centrist allies, the left-wing coalition New Popular Front, and the far-right National Rally. Both opposition blocs, typically at odds, are uniting against Barnier, accusing him of imposing austerity measures and failing to address citizens' needs.
Speaking on TF1 television after the vote, National Rally leader Marine Le Pen said “we had a choice to make, and our choice is to protect the French” from a “toxic” budget.
Le Pen also accused Macron of being “largely responsible for the current situation,” adding that “the pressure on the President of the Republic will get stronger and stronger.”
Speaking at the National Assembly ahead of the vote, hard-left lawmaker Eric Coquerel had called on the government to “stop pretending the lights will go out,” noting the possibility of an emergency law to levy taxes from Jan. 1, based on this year's rules.
“The special law will prevent a shutdown. It will allow us to get through the end of the year by delaying the budget by a few weeks,” Coquerel said.
Macron to pick a new prime minister
Macron must appoint a new prime minister, but the fragmented parliament remains unchanged. No new legislative elections can be held until at least July, creating a potential stalemate for policymakers.
Macron said discussions about him potentially resigning were “make-believe politics” during a trip to Saudi Arabia earlier this week, according to French media reports.
“I'm here because I've been elected twice by the French people,” Macron said. He was also reported as saying: “We must not scare people with such things. We have a strong economy.”
Impact on financial markets
While France is not at risk of a U.S.-style government shutdown, political instability could spook financial markets.
France is under pressure from the European Union to reduce its colossal debt. The country's deficit is estimated to reach 6% of gross domestic product this year and analysts say it could rise to 7% next year without drastic adjustments. The political instability could push up French interest rates, digging the debt even further.
Carsten Brzeski, global chief of macro at ING Bank, said uncertainty over France's future government and finances is deterring investment and growth. “The impact of France not having a government would clearly be negative for the growth of France and hence the Eurozone,” Brzeski said.
France has seen bond market borrowing costs rise, bringing back ugly memories of the Greek debt crisis and default in 2010-2012.
Analysts say France is far from a similar crisis because much of its outstanding debt does not come due for years, and because its bonds remain in demand due to a shortage of German government bonds. Additionally, the European Central Bank could intervene to lower French borrowing costs in case of extreme market turmoil, though the bar for that remains high.
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Three company directors held in Rs 100-crore investment fraud in Kochi
Kochi (Kerala) (PTI): Police on Sunday arrested three directors of a firm accused of cheating hundreds of investors of over Rs 100 crore through a fake investment scheme linked to agricultural tourism here, officials said.
The accused were identified as Muraleedharan, Ashik Murali and Akhil Murali, all natives of Thrissur.
The arrests were made by the Kalamassery police in connection with a fraud involving ATCOS (Agri Tourism Cooperative Society), a firm headquartered at Pathadipalam here.
Police said the company had promised high returns by collecting investments from the public in the agricultural tourism sector, but allegedly cheated hundreds of people and fled with the money.
ATCOS was registered under the Multi-State Cooperative Societies Act and operated 13 branches across various districts in Kerala, besides a branch in Coimbatore in Tamil Nadu, officials said.
When investors failed to receive their promised returns or the invested amount, complaints were filed with the police.
Officials said around 54 cases have been registered against the firm in 32 police stations across the state, including 29 cases at the Kalamassery police station alone.
Following instructions from Kochi City Police Commissioner K S Mahesh Kumar, a special investigation team was formed under the supervision of Deputy Commissioner of Police (Law and Order) Shehensha and Thrikkakara ACP Manoj Kumar.
The team traced the accused to an apartment in Amala Nagar in Thrissur, where they had been hiding after secretly renting the flat, officials said.
The bank accounts of the accused have been frozen, and steps have been initiated to trace their assets, officials said.
Police also conducted a raid at the company’s office at Pathadipalam and seized several documents related to the case.
The accused were produced before the Judicial First Class Magistrate Court in Kalamassery, which remanded them to judicial custody and sent them to Kakkanad jail.
Police said they would seek the custody of the accused for further interrogation as the investigation continues.
