French Politics in Turmoil: The Fall of François Bayrou

French Prime Minister François Bayrou faced a major setback as he lost a critical vote of confidence in parliament on Monday. The outcome plunges the euro zone's second-largest economy into deeper political turmoil.

The expected defeat saw 364 votes against Bayrou, with only 194 in his favor. Bayrou is set to submit his resignation to President Emmanuel Macron. As pressure mounts, Macron has not yet called for a snap election and is considering appointing a new prime minister, potentially from the center-left. As of now, there are no strict guidelines on whom Macron should select, or the timeline for this decision. Meanwhile, Bayrou may continue in a caretaker role if Macron delays.

Amidst this political uncertainty, the far-right National Rally and the hard-left France Unbowed are advocating for immediate parliamentary elections and even calling for Macron's resignation. As France braces for a tense September, nationwide protests are scheduled, and Fitch Ratings is set to review France's credit status. These developments follow Macron's controversial decision for a snap parliamentary election in 2024, leading to a fragmented parliament and weakened governmental control.

(With inputs from agencies.)