Special Coverage: French Government Falls After Vote

Bloomberg Audio Studios, podcasts, radio news. 0:00:07.080 --> 0:00:10.480 Lawmakers from the far left and right of France's political 0:00:10.480 --> 0:00:13.680 spectrum are set to combine and topple Prime Minister Michelle 0:00:13.720 --> 0:00:17.520 Barnier's government tonight in at Paris. The National Assembly set 0:00:17.560 --> 0:00:20.920 to reconvene as we speak, and that is when we're 0:00:20.960 --> 0:00:24.400 supposed to get the result. Covering it all is Stephen Carroll, 0:00:24.520 --> 0:00:27.840 Bloomberg Radio Daybreak Europe anchor. Stephen joins us from our 0:00:27.840 --> 0:00:30.840 Paris bureau. Stephen, good to see you this evening. Earlier 0:00:30.880 --> 0:00:33.360 in your career, you spent a decade working for France 0:00:33.440 --> 0:00:37.400 twenty four Television in Paris. You've interviewed President Emmanuel Macron, 0:00:37.640 --> 0:00:40.640 Prime Minister Michelle Barnier. How did we get to where 0:00:40.640 --> 0:00:41.400 we are today? 0:00:43.800 --> 0:00:47.240 I mean, the short answer is that Emmanuel Macron called 0:00:47.280 --> 0:00:49.519 an election in June. He wasn't happy with how his 0:00:49.600 --> 0:00:52.800 party date in European Parliament elections, so he decided to 0:00:52.800 --> 0:00:56.040 go to the country, dissolve the parliament, the National Assembly 0:00:56.200 --> 0:00:59.360 call elections, thinking that it would reinforce his position give 0:00:59.400 --> 0:01:02.120 French people the choice of who they wanted to govern. 0:01:02.200 --> 0:01:05.080 And fortunately French people didn't have the same idea. And 0:01:05.080 --> 0:01:08.160 what he ended up with was fewer numbers of MPs 0:01:08.240 --> 0:01:11.160 in the National Assembly and a very fractured parliament. That 0:01:11.280 --> 0:01:15.399 left three large groupings, the Marie Lepens National Rally on 0:01:15.520 --> 0:01:18.480 the right, the far right, his Centrist group which he 0:01:18.520 --> 0:01:20.839 picked up some of the center right party as well, 0:01:20.920 --> 0:01:23.320 and this left wing alliance which is the biggest group 0:01:23.640 --> 0:01:26.720 in the parliament as well. Nobody had a majority, nobody 0:01:26.800 --> 0:01:29.840 could govern. Then he had to try and find a 0:01:29.840 --> 0:01:32.560 government because his job as president he gets to nominate 0:01:32.600 --> 0:01:35.800 the Prime Minister and set the agenda for policy. He 0:01:35.880 --> 0:01:38.679 picked Michel Baunier, this man who has had a storied 0:01:38.720 --> 0:01:42.040 fifty year career in French politics. He's been a minister, 0:01:42.080 --> 0:01:44.720 He's been a European commissioner, he was the ease chief 0:01:44.760 --> 0:01:48.000 negotiator on Brexit. He is a statesman. He brings with 0:01:48.120 --> 0:01:50.880 him He's not from Macron's political family, so he brings 0:01:50.880 --> 0:01:53.160 with him the sense of somebody who is above the 0:01:53.200 --> 0:01:56.560 fray of politics. He's not currently an elected politician, so 0:01:57.000 --> 0:01:58.760 got him in to try and run the government to 0:01:58.840 --> 0:02:02.680 pass a budget, which was the biggest immediate concern. He 0:02:02.760 --> 0:02:06.280 brought the budget to Parliament, tried to negotiate a compromise 0:02:06.360 --> 0:02:10.280 with the various groups. Wasn't able to do that. Used 0:02:10.320 --> 0:02:13.600 a constitutional provision that allows them to force it through parliament. 0:02:13.840 --> 0:02:16.480 But unfortunately, the downside of using that provision is is 0:02:16.480 --> 0:02:19.280 that the opposition can call a vote of no confidence 0:02:19.320 --> 0:02:21.280 in the government. And that's where we are now, and 0:02:21.320 --> 0:02:23.919 they're currently voting. After about two and a half hours 0:02:24.200 --> 0:02:26.880 of debate in the French Parliament, lots of views expressed. 0:02:26.919 --> 0:02:29.160 Mitelvannie got up at the end to lay out his 0:02:29.240 --> 0:02:32.240 position to saying it's a moment of truth and responsibility 0:02:32.320 --> 0:02:34.680 for France and we'll find out if anyone listened to 0:02:34.720 --> 0:02:36.200 him in just a couple of minutes time. 0:02:37.720 --> 0:02:42.360 And Stephen, what happens in the immediate aftermath if the 0:02:42.400 --> 0:02:50.200 French government loses the no confidence vote. 0:02:47.800 --> 0:02:50.040 So we will. The first thing that happens is the 0:02:50.040 --> 0:02:52.600 government has to resign, right, so Mite Albanni and all 0:02:52.600 --> 0:02:56.160 of his ministers will present their resignation to the President. 0:02:56.560 --> 0:02:58.800 It then turns to the president who will have to 0:02:58.880 --> 0:03:02.280 appoint the next government. But the more immediate problem, because 0:03:02.280 --> 0:03:04.680 there's no deadline for when Emmanuel Macron would have to 0:03:04.720 --> 0:03:07.640 pick a new prime minister to lead and form a 0:03:07.720 --> 0:03:11.120 new government. The more immediate problem is is France's current 0:03:11.120 --> 0:03:13.080 budget runs out at the end of the year, so 0:03:13.120 --> 0:03:15.520 then we roll over into twenty twenty five and into 0:03:15.720 --> 0:03:19.359 relative political unknown. There won't be a shutdown, and it's 0:03:19.360 --> 0:03:21.280 actually been funny and a lot of the discourse here 0:03:21.320 --> 0:03:23.240 people that keep mentioning, oh, it won't be like the 0:03:23.360 --> 0:03:24.720 US government. 0:03:24.720 --> 0:03:25.680 Shot, yeah, that's our problem. 0:03:25.760 --> 0:03:29.160 They'll still keep collecting. Yeah, they'll still keep collecting taxes. 0:03:29.280 --> 0:03:31.480 Even using the word shutdown in French was quite funny. 0:03:31.520 --> 0:03:33.919 But they're still going to collect taxes. Public services will 0:03:33.919 --> 0:03:36.200 still run. But essentially what they'll do is they'll take 0:03:36.200 --> 0:03:39.720 the twenty twenty four budget, carve it up into twelve pieces, 0:03:40.000 --> 0:03:42.480 and each department will get a twelfth of their budget 0:03:42.560 --> 0:03:45.440 every month. That that presents, as you might imagine, all 0:03:45.480 --> 0:03:47.800 sorts of problems, because it's very difficult to run the 0:03:47.800 --> 0:03:50.760 state on that sort of month to month basis. It's 0:03:50.760 --> 0:03:54.080 not like working on your overdraft. And the other problem 0:03:54.280 --> 0:03:56.360 is is that there were a load of measures in 0:03:56.400 --> 0:03:58.920 this budget that we're going to change things, both for 0:03:59.000 --> 0:04:03.200 taxpayers and for welfare recipients. So for taxpayers, the tax 0:04:03.360 --> 0:04:05.880 thresholds for income tax were due to rise and line 0:04:05.920 --> 0:04:09.400 with inflation. If that doesn't happen, everyone's got well not everyone, 0:04:09.400 --> 0:04:11.880 but eighteen million households are going to be paying more 0:04:11.960 --> 0:04:15.520 tax from January. There's good news though for pensioners. They 0:04:15.560 --> 0:04:19.600 were due to get their inflation linked increase delayed after 0:04:19.720 --> 0:04:22.240 January to later in the year. They actually will get 0:04:22.240 --> 0:04:25.360 their inflation linked increase in January if there isn't a budget. 0:04:25.800 --> 0:04:28.839 But all of this presents the same problem that France 0:04:28.880 --> 0:04:31.040 has had since the middle of last year. It's budget 0:04:31.080 --> 0:04:33.800 death as it is too large for EU budget rules, 0:04:33.800 --> 0:04:36.520 but also to be able to convince markets, and we've 0:04:36.520 --> 0:04:40.760 seen France's international borrowing costs rise as a result. Part 0:04:40.800 --> 0:04:42.800 of the issue now has to be is they need 0:04:42.839 --> 0:04:45.200 to come up with a credible fiscal plan for the 0:04:45.240 --> 0:04:48.120 country so as to cam the fears that exist on 0:04:48.160 --> 0:04:51.440 the markets. And the rise in borrowing costs has been moderate, 0:04:51.680 --> 0:04:54.160 hasn't got to quite extremes yet, but it sets up 0:04:54.160 --> 0:04:56.440 a huge task for whoever's going to take over after 0:04:56.480 --> 0:04:59.880 Michel Bagni, if indeed he is forced to resign, to 0:05:00.000 --> 0:05:02.200 whether or not they can put together the plan and 0:05:02.240 --> 0:05:05.159 achieve something that a man who was legendary for his 0:05:05.240 --> 0:05:07.240 negotiation skills, wasn't able. 0:05:07.040 --> 0:05:09.080 To well, we are waiting to hear from the National 0:05:09.120 --> 0:05:12.719 Assembly about the results of that vote. We will bring 0:05:12.760 --> 0:05:15.440 that to you imminently as we do get the results. Stephen, 0:05:15.760 --> 0:05:18.120 what about other names that at this point have emerged 0:05:18.160 --> 0:05:20.080 to take over as prime minister? What can you tell 0:05:20.120 --> 0:05:22.320 us there, Hi? 0:05:22.360 --> 0:05:24.760 Michel Varnier ruled himself out in an interview on French 0:05:24.800 --> 0:05:27.360 television last night, which is important because it had been 0:05:27.400 --> 0:05:30.880 something that had been speculated that perhaps an annual macron 0:05:30.960 --> 0:05:33.120 might just say we'll give it another go. By the way, 0:05:33.120 --> 0:05:35.919 the last time this happened when the only time since 0:05:36.080 --> 0:05:38.240 the current constitution has been in force in France, which 0:05:38.240 --> 0:05:40.799 is since nineteen fifty eight, the only time it's happened 0:05:40.800 --> 0:05:42.800 that a government has lost a vote of no confidence 0:05:42.839 --> 0:05:44.000 was in nineteen sixty two. 0:05:44.880 --> 0:05:47.440 Stephen, I'm sorry to cut you off. We're getting again, 0:05:47.480 --> 0:05:50.520 We're getting a result right now. The French government falls 0:05:50.520 --> 0:05:54.000 after no confidence vote in Parliament. The French no commindant's 0:05:54.000 --> 0:05:56.400 motion passes with three hundred and thirty one votes. Two 0:05:56.440 --> 0:05:59.800 hundred and eighty eight were needed, not too surprising given 0:06:00.080 --> 0:06:02.520 how closely you followed this, but what's your immediate reaction. 0:06:04.600 --> 0:06:06.960 I mean, look, it means there wasn't any defections. Michelle 0:06:07.000 --> 0:06:10.400 Barnier's call for responsibility doesn't seem to have won over 0:06:10.440 --> 0:06:12.640 any of the MPs he was hoping. He was particularly 0:06:12.640 --> 0:06:16.360 targeting the center left Party, the Socialist Party, who've been 0:06:16.360 --> 0:06:19.800 in government in France many times in recent history. The 0:06:19.880 --> 0:06:22.719 question of whether or not some of those MPs might 0:06:23.200 --> 0:06:26.240 be willing to abstain, for example, from this vote to 0:06:26.279 --> 0:06:28.960 try and save the government. He doesn't seem to have 0:06:29.000 --> 0:06:32.000 convinced them with this message. That's the number in and 0:06:32.040 --> 0:06:34.680 around what we expected, because it's basically if you add 0:06:34.720 --> 0:06:37.360 together the Left Ring Alliance and Marion Lea Penn's far 0:06:37.440 --> 0:06:40.479 right National Rally, those parties put together give us that 0:06:40.640 --> 0:06:42.960 total of in and around three hundred and thirty. So 0:06:43.000 --> 0:06:45.599 it looks like that they didn't manage to convince anyone 0:06:45.680 --> 0:06:49.039 to cross the line. It's a result that's pretty much 0:06:49.080 --> 0:06:52.640 then in line with expectations, but now opens up the 0:06:52.760 --> 0:06:56.479 question of what happens next. What will Emmanuel Macron do. 0:06:56.560 --> 0:06:58.880 He's just landed back in France in the past few 0:06:58.880 --> 0:07:02.320 minutes from visit to Saudi Arabia, where he was trying 0:07:02.320 --> 0:07:05.360 to brush off a lot of these political questions at 0:07:05.360 --> 0:07:09.480 home and continue on with international affairs to little avail 0:07:09.560 --> 0:07:11.679 as everyone just wanted to ask him what he planned 0:07:11.720 --> 0:07:15.920 to do after this vote went through. He had been 0:07:15.920 --> 0:07:18.840 asked on many occasions whether or not he might resign, 0:07:19.200 --> 0:07:21.360 and he says that's not an issue, it's not even 0:07:21.360 --> 0:07:23.160 in question that he would do that. Of course, his 0:07:23.240 --> 0:07:26.440 term runs till twenty twenty seven, so we now set 0:07:26.480 --> 0:07:30.440 ourselves up for the timeline where the French President can 0:07:30.480 --> 0:07:33.440 take as long as he likes to appoint a new government. 0:07:33.640 --> 0:07:35.480 We don't think he's going to leave it that long, 0:07:35.880 --> 0:07:38.880 but it does plunge us into a sort of political vacuum. 0:07:38.920 --> 0:07:41.480 Now we'll have to have a caretaker government to keep 0:07:41.520 --> 0:07:43.960 current affairs running, but it's going to make those big 0:07:44.040 --> 0:07:46.560 challenges like dealing with the budget even more difficult. 0:07:46.800 --> 0:07:49.960 Stephen, do we have a good idea of who would 0:07:50.200 --> 0:07:53.080 likely be the next prime minister in what that new 0:07:53.080 --> 0:07:54.520 government would look like. 0:07:56.920 --> 0:07:58.480 We don't. There are a couple of names that have 0:07:58.480 --> 0:08:01.360 been floated around, but it's not a specific list of 0:08:01.400 --> 0:08:04.440 people that have been floated. You could imagine that Emmanuel 0:08:04.520 --> 0:08:07.120 Macron would try and pick from, if not his own 0:08:07.160 --> 0:08:10.440 political family, those who've already said that they would ally 0:08:10.560 --> 0:08:13.160 with him. There had been a question before Michel Barnier 0:08:13.240 --> 0:08:14.920 was picked as to whether he might be able to 0:08:15.280 --> 0:08:18.560 pick a politician from the Socialist Party, that center left 0:08:18.600 --> 0:08:21.640 party and thus bring them into this center alliance that 0:08:21.680 --> 0:08:24.960 he was trying to create. But they couldn't agree between 0:08:25.000 --> 0:08:27.720 the left wing parties on the same candidate that Emmanuel 0:08:27.760 --> 0:08:30.520 Macron want wanted. That was Bonno Kaznov, who's a former 0:08:30.960 --> 0:08:33.360 interior minister. He was the one who had been mentioned 0:08:33.559 --> 0:08:36.040 last time around. This was in the discussions that led 0:08:36.120 --> 0:08:38.959 up to Michel Barnier being picked. But the names that 0:08:39.000 --> 0:08:41.960 are out there now are in the realm of speculation. 0:08:42.360 --> 0:08:46.560 There's no rallied support around someone. There's no obvious candidate 0:08:46.600 --> 0:08:49.640 for who would take over, because the challenge facing the 0:08:49.679 --> 0:08:52.240 person who takes on that they have the same parliamentary 0:08:52.280 --> 0:08:55.120 match to deal with. Michel Barnier was dealt a very 0:08:55.160 --> 0:08:58.520 difficult hand. He didn't have a majority in parliament. He 0:08:58.600 --> 0:09:01.040 did his best to try and build a way of working. 0:09:01.240 --> 0:09:03.360 He always said that he was leaving it to parliament 0:09:03.400 --> 0:09:06.640 to be able to legislate and negotiate on important matters. 0:09:06.880 --> 0:09:09.720 That's failed. You have to ask who would be brave 0:09:09.840 --> 0:09:12.600 enough to step into those shoes, because it's a pretty 0:09:12.679 --> 0:09:14.160 nasty hand of cards to be hand them. 0:09:14.280 --> 0:09:16.680 That's exactly where I want to go. We're getting some 0:09:17.080 --> 0:09:22.240 commentary from France unbowed lawmaker Mattil Panaut, who says that quote, 0:09:22.280 --> 0:09:26.199 finally the Barnier government has fallen along with its violent budget. 0:09:26.440 --> 0:09:30.400 Today is a historic day. What does a budget look 0:09:30.520 --> 0:09:33.000 like in France after this process? 0:09:35.120 --> 0:09:37.120 Well, look, we go into this situation where we're going 0:09:37.120 --> 0:09:40.319 to be going month to month from January. There's very 0:09:40.320 --> 0:09:42.760 little hope that even if a government was formed tomorrow 0:09:42.760 --> 0:09:45.280 that they would be able to resuscitate this current budget 0:09:45.320 --> 0:09:48.719 plan and actually get anything in place by the end 0:09:48.760 --> 0:09:50.800 of the year. So either way, when it comes to 0:09:50.840 --> 0:09:53.400 the end the thirty first of December, we're rolling into 0:09:53.440 --> 0:09:57.760 this suppose minimum service French state that's going to be 0:09:57.800 --> 0:10:00.880 in place from January of next year, and that's going 0:10:00.920 --> 0:10:03.800 to bring back in those questions around tax rises for 0:10:03.880 --> 0:10:06.679 a lot of households who are paying income tax, those 0:10:06.800 --> 0:10:09.360 rises for pensions as well, and there were specific things 0:10:09.440 --> 0:10:12.280 like extra financial aid for farmers which now won't be 0:10:12.360 --> 0:10:15.080 paid out because that won't go into the budget bill. 0:10:15.160 --> 0:10:18.080 So the next immediate step is that there will be 0:10:18.200 --> 0:10:20.400 a motion that will need to be passed in Parliament 0:10:20.720 --> 0:10:25.280 to I suppose activate this temporary measures to keep the 0:10:25.600 --> 0:10:28.320 state running the lights on, if you will. There's not 0:10:28.360 --> 0:10:31.880 expected to be any major opposition to that because no 0:10:32.040 --> 0:10:35.040 French politician wants to be responsible for, you know, no 0:10:35.120 --> 0:10:38.680 welfare payments being paid early next year, So there's not 0:10:38.720 --> 0:10:41.400 an expectation that we will have anything but this month 0:10:41.400 --> 0:10:45.439 to month situation operating from January with a larger budget 0:10:45.440 --> 0:10:47.800 deficit and with the pressure that's going to put on 0:10:47.840 --> 0:10:50.400 France's borrowing costs and international markets as well. 0:10:50.559 --> 0:10:53.640 We're speaking with Stephen Carrol, Bloomberg Radio Daybreak Europe anchor, 0:10:53.720 --> 0:10:56.840 joining us from our Paris bureau. Stephen Carroll has about 0:10:56.840 --> 0:11:01.280 a decade of experience covering French politics working for France 0:11:01.320 --> 0:11:03.920 twenty four TV in Paris. I do also want to 0:11:03.920 --> 0:11:07.280 bring in Steven Englander, global head G ten x FX 0:11:07.280 --> 0:11:10.440 research at Standard Chartered Bank. He joined us from New York. 0:11:11.280 --> 0:11:14.720 Steven Englander talking a little bit about the market reaction 0:11:14.800 --> 0:11:17.400 here French bond future is now pairing an earlier advance. 0:11:17.440 --> 0:11:19.920 After the vote result, the europaired gains to trade little 0:11:20.000 --> 0:11:24.360 change that around a dollar five. How are you looking 0:11:24.400 --> 0:11:27.079 at market reaction here? What's the trade? 0:11:27.880 --> 0:11:32.040 Well, I don't think that there's any immediate trade. We 0:11:32.080 --> 0:11:35.719 started seeing French freads widen around the middle of November. 0:11:37.160 --> 0:11:40.360 The euro has probably about a percent lower than it 0:11:40.400 --> 0:11:45.400 would have been absent you know, this issue. I think 0:11:45.440 --> 0:11:49.920 the last few days the market has reconciled itself to 0:11:50.080 --> 0:11:53.680 a kind of very much a caretaker government. But also 0:11:54.640 --> 0:11:57.400 you know, with what the other Steve mentioned, which is 0:11:57.400 --> 0:12:02.000 that the budget itself is kind of an austerity budget 0:12:02.840 --> 0:12:06.839 because nothing's indexed in nominal terms. It's all the same 0:12:07.320 --> 0:12:10.640 level of spending, so it's a lower real spending. So 0:12:10.800 --> 0:12:15.880 from from a market perspective, this isn't a disaster right now. 0:12:16.720 --> 0:12:19.960 If it does become a political crisis, like even deeper, 0:12:20.240 --> 0:12:22.840 or if it spills over to the rest of Europe, 0:12:22.880 --> 0:12:27.199 that would become much more intense. And you know, as 0:12:27.200 --> 0:12:30.280 we've seen here, typically these things get resolved because one 0:12:30.320 --> 0:12:33.640 side or another decides that it's taking a political beating 0:12:33.840 --> 0:12:38.720 being seen as responsible for you know, whatever, checks don't 0:12:38.720 --> 0:12:39.520 go out or whatever. 0:12:40.400 --> 0:12:42.680 Stephn Engler I was going to follow up and ask 0:12:42.880 --> 0:12:46.760 does this affect ECB policy at all? Is the Central 0:12:46.760 --> 0:12:49.800 Bank thinking about kind of this uncertainty around what happens 0:12:49.840 --> 0:12:50.960 next with the French budget. 0:12:53.000 --> 0:12:55.960 I think the ECB is more you know, say, cognizant 0:12:55.960 --> 0:12:58.840 of these issues right there. You know, we just hurt 0:12:58.920 --> 0:13:03.160 Powell sort of, you know, drawing strict lines between fiscal 0:13:03.400 --> 0:13:07.640 and and you know, government and the Central Bank. I 0:13:07.640 --> 0:13:10.360 don't think the ECB has those strict lines going back 0:13:10.400 --> 0:13:13.760 to the European fiscal crisis, so you know, maybe a 0:13:13.760 --> 0:13:16.720 little more likely to cut to make things easier. But 0:13:16.800 --> 0:13:19.480 I think initially at least their focus will be on 0:13:19.600 --> 0:13:23.760 trying to prevent any kind of spillover into the rest 0:13:23.760 --> 0:13:26.640 of Europe and reassure markets that they're ready to take 0:13:26.679 --> 0:13:28.040 action if anything would happen. 0:13:28.240 --> 0:13:30.199 Steven England or when you say spillover, do you mean 0:13:30.280 --> 0:13:33.360 political spillover? Do you mean spillover when it comes to markets? 0:13:33.400 --> 0:13:34.040 How do you see it? 0:13:35.120 --> 0:13:37.560 Well? I think in the first instance, if we start 0:13:37.600 --> 0:13:41.960 seeing Italian spreads going up, and you know, Portuguese spreads 0:13:42.000 --> 0:13:45.400 going up, that's exactly what they don't want and what 0:13:45.440 --> 0:13:47.920 they would react to. Initially, it's a little bit more 0:13:47.960 --> 0:13:51.959 delicate to try and intervene on French spreads when it's 0:13:51.960 --> 0:13:54.440 a French political crisis. But for the rest of Europe, 0:13:54.520 --> 0:13:57.000 I think their role is unambiguous. 0:13:57.160 --> 0:13:59.400 I want to bring back in Stephen Carroll, who's in 0:13:59.480 --> 0:14:03.760 our pair of bureau. The far left France Unbound party 0:14:03.800 --> 0:14:07.440 calls for Emmanuel Macron to resign. I know you've been 0:14:07.440 --> 0:14:09.760 getting caught up just in the last few minutes, Stephen. 0:14:10.240 --> 0:14:12.560 What sticks out to you as far as other names 0:14:12.559 --> 0:14:15.360 that potentially have emerged, or what the political future of 0:14:15.400 --> 0:14:16.000 Macron is. 0:14:18.040 --> 0:14:20.720 I mean, look, Emmanuel Macron has brushed off any suggestion 0:14:20.800 --> 0:14:23.000 that he will resign. There's no way that he can 0:14:23.040 --> 0:14:26.200 be forced to. This vote doesn't affect his position in power, 0:14:26.280 --> 0:14:30.000 and he's due to stay in office until twenty twenty seven. 0:14:30.040 --> 0:14:32.640 A person who very keenly would like him to resign, 0:14:32.680 --> 0:14:34.960 and we've seen that on the decision that she has 0:14:35.080 --> 0:14:39.240 made in supporting this no confidence motion is Marie Lepenn, 0:14:39.480 --> 0:14:41.720 the far right candor's course was the person who went 0:14:41.800 --> 0:14:45.320 up against Macron the last two presidential elections. Her support 0:14:45.360 --> 0:14:49.400 has been growing slowly and the margin by which Emmanuel 0:14:49.440 --> 0:14:52.360 Macron defeated her in the last presidential elections, was much 0:14:52.360 --> 0:14:55.520 smaller than in twenty seventeen. So she would very much 0:14:55.680 --> 0:14:58.320 like for there to be an early presidential election to 0:14:58.320 --> 0:15:00.880 get a chance for her to be a to get 0:15:00.920 --> 0:15:04.720 a shot at the presidency. Now it's not unusual that 0:15:04.760 --> 0:15:06.720 we'll have that same call from the far left. They're 0:15:06.760 --> 0:15:09.560 actually one of the biggest groups in Parliament, so they 0:15:09.720 --> 0:15:12.360 know that they have also significant support and that's been 0:15:12.800 --> 0:15:16.240 the story of how politics has evolved under Emmanuel Macron 0:15:16.480 --> 0:15:19.400 in poos who've seen greater support for far right and 0:15:19.560 --> 0:15:22.680 far left parties as a result. Some of those other 0:15:22.760 --> 0:15:24.880 names that you mentioned for prime minister, I mentioned Bernard 0:15:24.920 --> 0:15:27.160 Casnov a minute ago, the former socialist prime minister and 0:15:27.200 --> 0:15:30.440 Interior minister as well. Perhaps the left might be able 0:15:30.480 --> 0:15:33.160 to agree on him perhaps forming a government and that 0:15:33.200 --> 0:15:37.320 would open up the left side of the Parliament to 0:15:37.320 --> 0:15:41.360 be able to perhaps form a centrist coalition. Other ones 0:15:41.400 --> 0:15:43.360 that we have been talking about is the likes of 0:15:43.400 --> 0:15:46.040 Francois Bairrou, who is a centrist politician and early supporter 0:15:46.080 --> 0:15:48.600 of Emmanuel Macron way back when he ran for presidents 0:15:48.640 --> 0:15:51.240 the first time around. As well, quite a similar profile 0:15:51.240 --> 0:15:53.280 in some ways to Michelle Bannier. He's been around a 0:15:53.280 --> 0:15:55.520 long time in French politics. He has a certain amount 0:15:55.520 --> 0:15:57.640 of respect for the positions that he's had as well, 0:15:57.800 --> 0:15:59.800 and perhaps he could be someone who could draw people 0:15:59.840 --> 0:16:02.440 to either. But he's not really outside of the current 0:16:02.440 --> 0:16:05.280 alliance that mac Grown's in. You think this because he's 0:16:05.280 --> 0:16:08.840 already tried Michelle Bangiy someone who's already out of domestic politics, 0:16:08.840 --> 0:16:10.840 that perhaps he might be looking for someone a little 0:16:10.880 --> 0:16:13.640 bit bigger next time around that'll pull in new votes 0:16:13.640 --> 0:16:16.000 and new supports, so that'll be able to create some 0:16:16.080 --> 0:16:17.600 currency in parliament as well. 0:16:17.960 --> 0:16:19.720 Stephen Carroll, we're gonna have to let you go. I 0:16:19.720 --> 0:16:21.040 know you've got a busy night ahead of you. We 0:16:21.040 --> 0:16:22.960 definitely appreciate you taking the time and it joining us. 0:16:22.960 --> 0:16:26.640 That's Stephen Carroll of a Bloomberg Daybreak Europe. He's an 0:16:26.680 --> 0:16:29.880 anchor for Bloomberg Radio, joining us from Paris. So do 0:16:29.880 --> 0:16:31.520 you want to get back to Stephen England or Global 0:16:31.600 --> 0:16:34.680 head g TENFX Research at Standard Charter Bank, joining us 0:16:34.800 --> 0:16:38.360 from New York. The front French stocks closing in on 0:16:38.360 --> 0:16:41.960 their worst year since twenty ten, although the CAC forty 0:16:41.960 --> 0:16:44.440 today seemed to shrug off this news. It rose seven 0:16:44.480 --> 0:16:46.720 tenths of one percent. Can you talk about the equity 0:16:46.720 --> 0:16:48.400 market reaction around this at all? 0:16:50.680 --> 0:16:53.080 Well, you know, I think there's just a lot of 0:16:53.160 --> 0:16:56.680 uncertainty there, and you know, obviously there will be pockets 0:16:56.680 --> 0:17:01.320 where maybe they were, you know, expecting some help from 0:17:01.320 --> 0:17:03.840 the budget and that's not going to come. But I 0:17:03.880 --> 0:17:08.080 think it's more broad macro uncertainty than there is any 0:17:08.160 --> 0:17:12.800 you know, specific equity market risk. What we could see 0:17:12.880 --> 0:17:17.000 is is, you know, right now the turnover budget, it's 0:17:17.000 --> 0:17:19.680 sort of an austerity budget if it does turn out 0:17:19.720 --> 0:17:23.359 that they say reached an agreement, but it's much more expansionary. 0:17:24.400 --> 0:17:26.679 You know, we could see an equity market reaction, but 0:17:26.720 --> 0:17:30.000 we could also see markets looking at the fiscal situation 0:17:30.200 --> 0:17:31.600 and being a little concern. 0:17:32.600 --> 0:17:37.240 What about the outlook here for US versus Europe. We've 0:17:37.240 --> 0:17:41.240 obviously been watching europaroity. We're not there quite yet, but 0:17:41.240 --> 0:17:44.200 there's a lot of talk about the US dollar continuing 0:17:44.240 --> 0:17:49.080 to strengthen against other countries, other regions, including Europe. What 0:17:49.160 --> 0:17:52.040 are you kind of watching levels wise, and does this 0:17:52.520 --> 0:17:57.280 news in France kind of change the narrative at all? 0:17:57.440 --> 0:18:01.120 Well, dook, I think it does put U P. I mean, 0:18:01.320 --> 0:18:04.360 it obviously has put parody a little bit closer, if anything. 0:18:04.480 --> 0:18:08.120 What's surprising, you know, my guess is that we saw 0:18:08.320 --> 0:18:11.080 one percent, maybe slightly less three quarters of a percent 0:18:11.760 --> 0:18:15.000 impact on the Euro. So the market is seeing it 0:18:15.040 --> 0:18:16.960 as an issue. It's not really seeing it as a 0:18:17.000 --> 0:18:22.760 market crisis. If something were to develop that really led 0:18:22.840 --> 0:18:28.080 to prolonged political uncertainty, that would be much harsher. But 0:18:28.200 --> 0:18:30.879 I you know, till now, the market is sort of 0:18:31.359 --> 0:18:33.440 seeing it as a bad but not as a as 0:18:33.440 --> 0:18:34.119 a very bad 0:18:35.040 --> 0:18:38.040 Stephen England are global head G ten FX Research at 0:18:38.040 --> 0:18:40.520 Standard Charter Bank, joining us from New York