French No-Confidence Vote Forces Premier to Detail 2019 Budget
(Bloomberg) -- French Prime Minister Edouard Philippe’s government will face a no-confidence vote on Thursday. And while the administration has little chance to lose given its majority, it will force the premier to detail his budgetary plans for 2019.
The motion was filed by left-wing groups even though they have just 62 lawmakers out of 577 in the National Assembly. President Emmanuel Macron’s party Republic on the Move has 309 lawmakers and is allied to centrist groups that represent at least 74 extra votes.
Philippe has said he would detail plans for next year’s budget during his keynote ahead of the vote. His backing for Macron’s increased spending to defuse the Yellow Vest protest, which may represent about 10 billion euros ($11 billion), could push the deficit up to around 3.4 percent of gross domestic product, in a signal that containing the monthlong crisis will take priority over European Union budget rules.
The exact deficit “figure doesn’t really matter, it’s the trend that matters. And the trend is seen as downgrading,” said Stephane Barbier de la Serre, a strategist at Makor Capital Markets SA in Geneva. “It’s too early to give a definitive view at this point but it does raise a lot of questions.”
The potential budget slip may not draw the ire of Brussels after all, since EU Commissioner for Economic and Financial Affairs Pierre Moscovici said he believes that unlike Italy, France’s budget deficit breach could only be “temporary.”
“Comparing France and Italy is tempting but erroneous,” Moscovici said in an interview with Le Parisien newspaper. “The situations are totally different. The commission has had Italy under surveillance for years, we never had it for France.”
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