France’s prime minister Sébastien Lecornu has resigned less than a month after his appointment, prompting a market sell-off amid concern about dysfunction in the Eurozone’s second-biggest economy.
Mr Lecornu, a long-serving ally of French president Emmanuel Macron, submitted his resignation on Monday morning, the Élysée Palace said, making him the shortest-serving prime minister since the Fifth Republic was established in 1958 and heaping pressure on the president.
“One cannot be prime minister when the conditions are not met,” Mr Lecornu said in a televised address, accusing other parties in France’s fractured parliament of failing to compromise.
His resignation came after his allies in the conservative Les Républicains party indicated they could withdraw from his government because of dissatisfaction with some ministers he planned to include from Macron’s Renaissance party.
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The leftwing Socialist party also threatened to vote the government down unless Mr Lecornu suspended Macron’s signature pension reforms.
His departure as prime minister is likely to make it even harder for France to put a budget in place by the end of the year, damaging the country’s ability to tackle its deficit, set to be 5.4 per cent of GDP in 2025.
“The governability of France is declining,” said Jean-François Robin, global head of research at French bank Natixis CIB.
“In terms of public finances, it means less consolidation. No caretaker prime minister will have the majority to cut significantly into public spending.”
Mr Lecornu was the third prime minister appointed by Macron since snap parliamentary elections in summer 2024, a vote that left the French assembly bitterly divided and has made governing almost impossible. All three have now left office.
The president now faces the difficult challenge of either naming another prime minister who is likely to encounter the same difficulties as Mr Lecornu and his predecessors, or calling new parliamentary elections.
French markets fell on the news, with the Cac 40 stock index down as much as 2 per cent on Monday morning, led by declining shares in the country’s big banks, which are likely to be hit hard by any shock to the French economy.
Jordan Bardella, president of the far-right Rassemblement National, which is already the largest party in the assembly and is leading in French polls, urged Macron to call elections in response to the crisis.
“We have no other possibility but to return to the French people because, once again, the longer we wait, the more we play with the stability of the country and the anguish of our compatriots,” he said.
Far-left leader Jean-Luc Mélenchon described Macron as “the origin of the chaos” and called on him to resign to enable fresh presidential elections, a move the president has repeatedly ruled out.
A fall in government bond prices pushed up the country’s 10-year borrowing costs, while the euro fell against the dollar.
“The only way to stop this crisis is to have a new election,” said Emmanuel Cau, head of European equities strategy at Barclays. “It’s making Europe hard to invest in and creating an excuse for investors to tread carefully.”
He added: “The market has to think about the far right being in a position to capitalise.”
The additional interest rate paid on French debt over benchmark German Bunds – a closely watched measure of market worries – went close to its highest level since the Eurozone debt crisis more than a decade ago.
Mr Lecornu had promised a “rupture” with previous Macron governments but announced a slate of ministers from his predecessor’s cabinet, as well as some from earlier Macron administrations.
One particularly controversial choice for Les Républicains was Mr Lecornu’s decision to give the defence ministry to former finance minister Bruno Le Maire, a Macron stalwart under whose watch the French deficit rose substantially.
Bruno Retailleau, the Républicains’ leader, said there had been a “problem of trust”.
By contrast with previous Macron administrations, Mr Lecornu had vowed that he would not use a constitutional tool that enables the government to force through laws without submitting them to a parliamentary vote.
But he said that opposition forces had not recognised this “profound rupture”, adding that “partisan appetites” had emerged from parties within the governing coalition, in a veiled criticism of Les Républicains.
“I was ready for compromise. But each political party wants the other political parties to adopt the entirety of their programme,” he said. “One must always prefer one’s country to one’s party.”
– Copyright The Financial Times Limited 2025
