France in Turmoil: PM Lecornu Resigns Hours After Cabinet Announcement

France is facing renewed political uncertainty after Prime Minister Sébastien Lecornu resigned on Monday, only hours after unveiling his new cabinet. Lecornu, who was appointed last month by President Emmanuel Macron, stepped down following intense criticism of his largely unchanged ministerial line-up and mounting opposition in a deeply fragmented parliament.

In his resignation speech, Lecornu cited the inflexibility of political parties as the key reason for his departure. "I was ready to compromise, but each political party wanted the other political party to adopt its entire program," he said. Lecornu also stressed the importance of prioritizing national interest over party politics, indirectly criticizing Interior Minister Bruno Retailleau and the Republicans without naming them directly.

The short-lived cabinet sparked calls for snap parliamentary elections. Marine Le Pen, leader of the far-right National Rally, urged immediate elections, describing the dissolution of parliament as “absolutely necessary” and suggesting that Macron consider resigning - a move he has previously ruled out. Jordan Bardella, another National Rally figure, added that stability in France cannot return without new elections.

The government’s collapse highlights the difficulty in securing approval for next year’s austerity budget in a parliament where no party holds a clear majority. Lecornu’s predecessors, François Bayrou and Michel Barnier, were similarly forced out over budgetary disputes. The nation’s public debt has reached record levels, with France’s debt-to-GDP ratio now the EU’s third highest after Greece and Italy, nearly double the 60% ceiling set under EU rules. Unlike prior governments that pushed budgets through without votes, Lecornu had promised lawmakers a vote on the legislation, further emphasizing the challenges he faced.

Macron’s gamble on snap parliamentary elections last year, intended to strengthen his authority, backfired and left his supporters in a minority in the assembly. The sudden resignation of Lecornu and his cabinet - the shortest-lived in modern French history - has deepened the political crisis, prompting sharp market reactions. French stocks fell steeply, government bond yields rose by 8 basis points, and the euro weakened to $1.1667. The risk premium for holding French debt over benchmark German bonds reached its highest level since January, according to FRANCE 24.

Lecornu’s resignation underscores ongoing frustration among lawmakers, with the prime minister noting that parties behave as though they hold a parliamentary majority, despite the fragmented nature of the assembly. Analysts say the resignation not only intensifies political instability but also leaves pressing economic issues, including budget approval and public debt management, unresolved.

The crisis raises fresh questions about Macron’s ability to govern effectively amid a divided legislature, leaving observers to speculate on the timing and impact of potential snap elections on both domestic politics and financial markets.