PARIS — Europe was already facing a toxic cocktail of Vladimir Putin’s war in Ukraine, Donald Trump’s assault on global trade and the rise of far-right populists across the region.
Then the French government collapsed yet again — this time having lasted less than a day in office — spooking markets with the prospect of a fresh election that could bring the far right closer to power than ever.
In Brussels and other European capitals, officials and diplomats voiced their private fears that President Emmanuel Macron’s leadership on international issues such as Ukraine and Gaza will be fatally weakened. Some worried that the entire eurozone economy may soon be in peril as a result.
“France is too big to fail, so this endless political instability puts the entire eurozone at risk,” said one diplomat from an EU country, who like others in this article was granted anonymity to comment on another country’s domestic situation. “It is the main subject at all the water cooler conversations today.”
With good reason. France is the European Union’s second-biggest economy, a leading player in the G7, the EU’s only nuclear power, and a permanent member of the U.N. Security Council. Just as significantly, under Macron it has been a political force driving EU affairs rivaled only by the might of Germany.
At the same time, Macron has been trying to fend off the threat of the far-right National Rally, which consistently leads in opinion polls, while tackling France’s large budget deficit.
But his governments have been unable to pass measures to rein in public spending through parliament. A prolonged political stalemate increasingly raises the likelihood of new legislative elections before the end of the year, bringing additional months of uncertainty.
Some observers are now even contemplating Macron’s early resignation as president. His term is due to end in 2027.
Each of these outcomes would open the door for Marine Le Pen’s far-right National Rally party to make major gains, potentially upending European politics and unleashing a wave of instability. Chief among the concerns raised by EU diplomats and officials in national capitals was the risk to the eurozone.
Bad trading
On Monday, traders in markets in France and beyond reacted with alarm to the dramatic unraveling of Sébastien Lecornu’s 14-hour-old administration. French stocks and government bonds fell, and the euro itself weakened against the dollar. France’s benchmark CAC 40 index dropped 1.4 per cent.
“There are already many concerns around the eurozone economy,” said one government official from a eurozone country. “We really don’t need this.”
Internally, French officials sought to play down the risks. One said that despite the “complexity” there is still “a pilot in the cockpit” at the economy ministry and that the markets shouldn’t overreact. Not everyone is convinced.
“The efforts of President Macron over the past eight years [has been to say] France is the most attractive place in Europe to invest,” said Grégoire Roos, program director for Europe and Russia at the Chatham House think tank in London.
“I don’t see any significant international investor choosing France at the moment given the absolute lack of political clarity and also fiscal clarity.”
Political obituaries
In Brussels, some EU diplomats are already privately writing Macron’s political obituary. Having shot to power in 2017 and broken the mold of French politics, they said, he now appears a lame duck leader whose influence in Brussels is fading fast.
A second EU diplomat spoke of Macron’s “legacy” as a powerful thinker who had generated many ideas to drive change in Europe, and who had persuaded other leaders to embrace some of them. The concept of “strategic autonomy” — making the EU more self-sufficient economically and in defense — was born years ago in Paris, the diplomat noted.
With President Trump now pulling the U.S. away from Europe, it’s an idea that has come of age in Brussels. “Not many leaders are willing and able to think five or even two years ahead,” the diplomat said. “He was so good at doing that.”
Macron, of course, was elected to be in office until 2027, and despite speculation has given no indication he will resign. If he stays, however, the turmoil in Paris means French influence on EU debates and policy development is likely to be diminished.
Discussions among finance ministers on the EU budget would be much easier for France to shape, for example, if it could consistently send the same minister to meetings with their counterparts in Brussels, the diplomat said. But the repeated personnel shakeups in Paris make it far harder for the French position to hold sway.
An early election, on the other hand, could imperil the EU’s next long-term budget. National governments discussing the budget had set an informal deadline to get a deal before the French election in 2027, given the danger that Le Pen might politicize and ultimately derail the debate, said the eurozone government official quoted above.
Missing in action
Macron has been central to European efforts to support Ukraine and the continent itself against Russia, both by urging fellow leaders to do more to equip Europe with its own military capabilities and by coordinating with allies.
His joint initiative with U.K. Prime Minister Keir Starmer to assemble a “coalition of the willing” remains the only game in town when it comes to supporting any eventual peace deal in Ukraine. “It’s not good for the EU if one of the biggest member states is in turmoil, especially in the current security situation,” the same eurozone official said.
A muscular “Franco-German engine” — with powerful leaders working together in Paris and Berlin — is conventionally seen as essential to making the EU strong and efficient. Macron’s travails make that far harder to achieve, even with a new leader in Germany in Friedrich Merz, who is seen in Brussels as far more dynamic than his predecessor.
A French official from the cabinet of an outgoing minister acknowledged the problem. “This leaves France absent at a time when Russia is making incursions into European territories, [when] China has incredible industrial overcapacity, and [when] Trump’s United States continues to do silly things,” the person said. “I think France’s leadership will be missing. It’s impossible for France to give what France has to give under these conditions.”
Then there’s the question of what, or who, comes next. If Macron does trigger new elections, the French far right stands to gain, although the RN’s poll share has remained broadly stable at around 30 percent to 32 percent since the 2024 legislative elections.
Europe’s far right has been emboldened by Macron’s struggles, even before Monday’s government collapse. Le Pen, the godmother of the National Rally, celebrated the victory of rightist-populist Andrej Babiš in last weekend’s election in the Czech Republic — and used Monday’s crisis to reiterate her calls for a new election.
Geert Wilders, the veteran far-right Dutch firebrand who won the most seats in the last election in the Netherlands, had a warning for “all the old leaders,” including Macron, earlier this year: “Your time is over.”
Sarah Paillou contributed reporting.
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