Here in Europe and in France, markets
have been hit by the prospect of another
government collapse within two weeks.
All this after Prime Minister Francois
Beu called a confidence vote in
Parliament for this September the 8th
over unpopular plans to fix the
country's finances. While the farright
national rally, the Greens and the
left-wing France Unbowed have said that
they will not back him in the vote.
Well, Mr. Beu is trying to push through
44 billion e worth of spending cuts and
tax rises. He told a press conference
that France has no choice.
>> Is it a risk? Yes, it's a risk. But the
bigger risk, the supreme risk is to do
nothing.
>> The supreme risk is allowing a public
debate for the situation to get worse
and see confrontations. People who say
we will block everything and deep down
people who think that it's not all that
bad. Msia, it is that bad. I cannot say
this any more clearly.
>> So pretty clear there from the prime
minister. Uh now the upshot of which uh
economist Charlotte de Melia from ING
research says is all likely to be a drag
though on the economy.
>> The impact of the economy is more
uncertainty and we know that uncertainty
is got good not good for growth. So the
the first impact will be uh lower growth
because of this uncertainty. We know
that companies they they are in a very
difficult position when they have they
have to do plans investment plans when
there is so much uncertainty. So
probably uh we are going to see less
growth due to that. Uh we also know that
the political situation is likely to
extend. So this uncertain political
situation is likely to extend in the
sense that after the vote of confidence
as Beiru is likely to lose then we there
is no easy fix for the situation. So it
means that probably for a few months we
are going to stay in a very uncertain
environment. We also know that it means
that probably the budget for 2026 will
not be be voted because there is no
majority no uh no way that the
parliament will agree on something for
the budget and this means that of course
the trajectory of public finance will
worsen even even further. So that's very
clear and again this means more
uncertainty for the future. So all in
all I would say that the economic impact
of all of this is quite negative.