France plunges further into political crisis: Will Macron's next step be "self-rescue" or "self-destruction"?

French Prime Minister Gabriel Attal unexpectedly resigned after only 27 days in office, presenting another major political challenge for President Emmanuel Macron. This long-time Macron ally and former defense minister resigned on Monday, even before he had the chance to announce his new cabinet’s governing plans.

He stated that after negotiations with opposition parties, none of the parties were willing to compromise on budget and policy demands, making him feel unable to lead this center-right minority government.

“Every party is behaving as if it has a majority in parliament,” Attal said, adding that the “conditions for staying on are no longer met.”

The current crisis in France is largely self-inflicted by Macron. Last year, he dissolved parliament in hopes of bringing “clarity” to a fragmented National Assembly, but the subsequent election results only led to more political deadlock and power struggles. Macron has been unwilling to hand over government leadership to any side, instead appointing his own confidants to head minority governments, but these governments are vulnerable to no-confidence votes from opposition parties.

Attal’s short-lived government is the third to collapse after those of Barnier and Bayrou. The common thread among these three governments is that they all struggled to reach agreements with other parties on the national budget, especially regarding the spending cuts and tax increases needed to control France’s budget deficit. France’s budget deficit for 2024 stands at 5.8% of GDP.

In a surprising twist, Macron on Monday evening gave Attal an extra 48 hours to conduct “final negotiations” with opposition parties in an attempt to break the deadlock. Attal posted that he would report any potential breakthroughs to Macron by Wednesday evening, “so that he can draw all necessary conclusions.”

Macron’s Next Steps

Macron now faces a “hot potato”—no matter which path he chooses, it is unlikely to be easy for the embattled president. Macron has repeatedly stated that he will not resign, as doing so would trigger a presidential election originally scheduled for 2027.

Macron could appoint another prime minister, which would be the sixth in less than two years. However, choosing a prime minister from outside his own political camp would be an uncomfortable and face-losing move for him, as he has consistently chosen confidants to lead the government over the past year.

Alternatively, he could dissolve parliament and call new parliamentary elections, but this option is equally unattractive for Macron. Currently, Marine Le Pen’s anti-immigration party “National Rally” is leading in the polls with a support rate of about 32%, while the left-wing alliance “New Popular Front” has about 25% support.

Analysts believe Macron is unlikely to choose resignation. INSEAD political science professor Douglas Yates said in an interview on Monday, “Doing the right thing is too dangerous for him, and of course, he is unwilling to give up power. I can say with certainty today that Macron will not announce his resignation, so the simplest thing is to appoint another prime minister—he does this as often as changing clothes. If the new prime minister’s term is short, he can appoint another one. This is his institutional advantage.”

Yates does not believe Macron will call new elections, adding, “because the last time he did so, the results were disastrous.” Any new poll would still reflect the polarized nature of French politics, with voters “abandoning his party and voting with their hearts, whether for the left or the right.”

Left or Right?

There are rumors that Macron may risk nominating a prime minister from outside his own system, and it is possible he could choose someone from the center-left Socialist Party.

It is unlikely that Macron will choose a candidate from the far-left France Unbowed party or the far-right National Rally, as both parties called for Macron’s resignation on Monday.

Yates said, “So far, he has chosen the wrong people; by choosing centrists, he has alienated both the left and the right, and I think he would do better to offer some benefits to the center-left, as these people could help him form a government and possibly avoid impeachment. So I think a Socialist Party member might be the most acceptable, or perhaps even a candidate from the Green Party.”

The Budget Dilemma

As the political deadlock in Paris continues, the 2026 budget bill remains unresolved. Economists believe it is increasingly likely that this year’s budget will be rolled into next year’s as a stopgap measure.

Deutsche Bank’s Yacine Rouimi said last Monday that if the government collapses as it has now, France may operate under a special law, “keeping spending close to the 2025 framework, with the deficit then falling to around 5.0% to 5.4% of GDP.” Rouimi also said: “We may soon see new elections.”

If Macron chooses to appoint a new prime minister from a different party (such as the Socialist Party), this means that the reform or spending cut proposals put forward by previous governments but failed may be further ‘cut and reduced’.

UniCredit economist Salomon Fiedler noted in an email comment on Monday that Macron “may appoint a prime minister from the center-left (or even the far right). However, this is likely to bring painful reversals to his previous pro-growth structural reforms (such as raising the retirement age) and could lead to fiscal slippage.”