French Government Collapses as PM Bayrou Ousted After Confidence Vote

French Prime Minister François Bayrou resigned after losing a confidence vote in the National Assembly, marking the fourth government collapse in France since early 2024 amid mounting economic and political challenges. Bayrou's government fell due to opposition to his proposed €44 billion austerity plan aimed at reducing France's soaring public debt, which stands at 114% of GDP, with measures including scrapping public holidays and freezing government spending. The fragmented parliament, resulting from President Emmanuel Macron's 2024 snap election gamble, has produced political deadlock, with both far-right and far-left parties uniting against the government's budget proposals. The collapse triggered market turmoil, with French bond yields surpassing those of Spain, Portugal, and Greece, and raised concerns about a looming sovereign debt downgrade. Macron faces the difficult task of appointing a fifth prime minister in less than two years or potentially dissolving the National Assembly to call new elections, a move that carries significant political risk given the far-right's electoral strength. Bayrou warned lawmakers that despite their power to bring down the government, the underlying fiscal realities and rising debt burden remain unavoidable issues for France.