The far-right in France has been supporting the government, but now has the potential to bring it down.

• The National Rally party is threatening to bring down Prime Minister Michel Barnier's administration in France, putting the government's future in jeopardy.
• Marine Le Pen of the National Rally announced on Monday that negotiations with Barnier regarding a 2025 French budget bill tax increase had resulted in an unsuccessful agreement.
• An unpopular budget bill could lead to the government's downfall if the left and right unite in opposition.
• If Barnier's government collapses, France may face several months of political and economic instability.

The National Rally party in France is threatening to bring down Prime Minister Michel Barnier's administration by the end of the year, putting the government's future in jeopardy.

Marine Le Pen, the figurehead of the National Rally, announced Monday that negotiations with Barnier to modify the 2025 French budget bill, which includes tax increases, were unsuccessful in producing the necessary changes for her party to approve the government's plans.

Le Pen stated on Monday that the acceptance of today's proposals is uncertain, as reported by the Associated Press.

The prime minister was reminded of his party's "red lines" by her, including opposition to raising electricity taxes and delaying state pension increases.

"We stated our non-negotiable elements and our political stance," Le Pen said, according to AP. "We remain firm in our defense of the French people."

If the government fails to make the necessary changes to the budget in December, Le Pen's National Rally party will support a confidence vote, as threatened by the New Popular Front (NFP) alliance.

In the coming weeks, the Senate and National Assembly will review and debate the original budget bill, which has already been rejected by a majority of lawmakers in both its original and amended forms. The Senate will then vote on the bill on Dec. 12, and it must be passed by Dec. 21.

Barnier has hinted at the possibility of employing special constitutional authority to bypass a parliamentary vote and enact the budget through a presidential decree.

The French constitution's Article 49.3 permits opponents to submit a no-confidence motion, but only if both left and right opposition parties unite, can they successfully bring down the government.

The outcome of the election now depends on Le Pen's next steps, according to Carsten Nickel, deputy director of research at risk consultancy Teneo.

In analysis last week, it was stated that while the leftwing NFP will certainly propose such a motion, the key player is Le Pen.

"Her RN had been expected to abstain, but Le Pen's ongoing embezzlement trial threatens to unsettle this calculation."

The trial of Le Pen and other key RN figures is ongoing, with charges of embezzling money from the European Parliament through fake jobs. Despite denying any wrongdoing, Le Pen faces the possibility of imprisonment and a five-year ban on French politics, which would put an end to her presidential aspirations for the 2027 elections.

The trial adds an additional layer of uncertainty to whether National Rally will follow through on its threat to topple Barnier's government. If they do, it would be a distraction for Le Pen, according to David Roche at Quantum Strategy, but it's uncertain whether she will want to be responsible for causing more political chaos and economic uncertainty for the European Union's second-largest economy.

Crisis brewing

Since the inconclusive parliamentary elections in the summer, France's political establishment has been in disarray, with both the rightwing RN and leftwing NFP winning respective rounds of the vote.

Despite being sidelined after the election, the French President Emmanuel Macron appointed right-leaning conservative Michel Barnier to head a minority government, which caused frustration among the left.

Barnier's government, comprised of Macron's centrists and members of Les Républicains, has been dependent on National Rally for support and its continuation, exposing it to the influence of its leaders, Jordan Bardella and Marine Le Pen.

In October, Barnier's government survived a vote of no confidence brought by outraged NFP lawmakers, led by Jean-Luc Mélenchon, who feel they were robbed of their election win. National Rally abstained from that vote, effectively saving the fledgling government.

The 2025 budget bill, presented on Oct. 10, has sparked controversy, with far-right opposition to the government's plans to save 60 billion euros ($62.85 billion), with 40 billion euros coming from spending cuts and the remaining 20 billion euros through tax increases.

To reduce the country's yawning deficit to around 5% of GDP in 2025, down from an expected 6.1% in 2024, which is over twice the level permitted by the European Commission, the government must take action.

The EU requires member countries to keep their budget deficits below 3% of GDP and their public debt below 60% of GDP. In 2023, France's budget deficit was 5.5% of GDP, and its public debt reached 110%. Budget Minister Laurent Saint-Martin warned last month that the deficit could increase to 7% in 2025 if drastic measures were not taken.

According to David Roche at Quantum Strategy, the French government is likely to fall in December, but legislative elections cannot be held until June 2025, as per law (12 months after the last election called by Macron).

Roche stated in emailed comments Tuesday that Macron has the option to keep Barnier as head of a caretaker government without a budget or appoint someone like the Governor of the Bank of France to lead a passive government with minimal tasks until June, before more elections and instability.

If the government falls, Roche warned that "any notion that France will reduce its deficit and debt is unrealistic."

The individual thought that the economic data from France is inaccurate and that the current budget deficit is actually 6.5%, while the public debt to GDP ratio is 112%.