How France's Political Crisis Shook Euronext
According to the Analysis and Translation Group of the Stock Information and Training Company and citing Euronews, only 9 months after the start of François Bayrou's government, the French Prime Minister's cabinet fell with a decisive parliamentary vote. This heavy result indicated the clear failure of the economic and austerity policies that Bayrou pursued with President Macron's support.
The government's economic program included an increase in the tax burden and a €44 billion cut in public spending, which was quickly described by opponents as "austerity, inefficient, and anti-growth." Even parts of parties allied with the government refused to support this policy. Therefore, the government's fall cannot be seen merely as the Prime Minister's failure, but rather as a vote of no confidence in Macron himself and his economic path.
France in 2000, by merging the Paris, Brussels, and Amsterdam exchanges, initiated the formation of the first integrated European stock exchange, now known as "Euronext," encompassing seven major European financial markets. Therefore, any political or economic development in France directly impacts Euronext's performance and investor confidence.
The fall of Bayrou's government led to a decline in Euronext indices in Paris and Amsterdam. Many international investors, who had looked positively at the European market following the 2022 energy crisis, now find themselves in uncertainty again. Experts say that in the short term, capital outflow from France to safer markets such as Germany or even U.S. bonds is expected to increase.
Emmanuel Macron, initially presented as a reformer and reviver of France's economy at the start of his presidency, has now lost his third prime minister in less than two years. This situation has made his political position increasingly vulnerable. Failure to gain support from major parties like the Republicans and Socialists could cause the next government to face a similar fate, increasing the likelihood of early elections—a scenario benefiting far-right movements.
Meanwhile, social discontent and widespread labor union strikes, which had previously erupted in protest against pension reforms, have intensified again and may make foreign investors more cautious about France's market future.
Opposition parties reacted differently to this event: the Socialists called it an "isolationist move," while the Greens considered it a "acceptable but insufficient outcome." The far-right demanded early elections.
Analysts believe that the failure of austerity policies has not only clouded France's economic future but also weakened its position in the European Union and the Eurozone. From their perspective, this instability could lead to a loss of confidence among international investors and a decline in France's credit rating.
On the eve of reviewing the 2026 budget and social security bills, France's political climate is more fragile than ever. In the coming days, the "Fitch" institute is expected to announce France's credit rating, a decision that could have an immediate effect on the bond market and the government's ability to attract foreign investment.
Experts warn that if the credit rating drops, France's borrowing costs will increase, putting more pressure on the economy. This cycle could lead to further declines in Euronext indices and even spread the crisis to other European financial markets.
The fall of the French government has had wide coverage in international media. Analysts have emphasized the unprecedented challenges facing France, the structural inefficiency of its political system, and the impact of the failed austerity programs. This political instability could also affect France's position in the EU and the economic stability of the Eurozone.