French far right joins forces with left to topple government

Far-right leader Marine Le Pen teamed up with a left-wing coalition to topple the French government, pitching the country into a prolonged period of turbulence that’s likely to further unsettle investors.

A majority of lawmakers in the National Assembly backed a no-confidence vote against Prime Minister Michel Barnier’s three-month-old administration following a dispute over next year’s budget. It was the shortest tenure for a premier since France’s Fifth Republic was founded in 1958.

The roots of the current turmoil date back to June, when President Emmanuel Macron called a snap vote as he sought to rebound from defeat in the European elections. Instead, he made Le Pen’s National Rally the largest party in parliament and its leader became the country’s most influential power broker while his centrist coalition crumbled.

“To those who think I’m intent on choosing a policy of disaster through a vote of no confidence, I want to tell them that the disastrous policy would be not to censure such a budget,” she told lawmakers on Wednesday. “It’s the end of this ephemeral government.”

The chaos in the European Union’s second-biggest economy prompted bond investors to punish France’s sovereign debt relative to its peers, pushing up borrowing costs beyond countries like Spain and Greece, that have traditionally been seen as riskier.

Barnier had warned of a “storm” in financial markets if he was ousted.

The outgoing administration will continue in a caretaker capacity for the time being, allowing the government to avoid a U.S.-style shutdown. Barnier can use emergency laws to collect taxes and guarantee a minimal level of spending, but the broader impact is hard to predict.

Finance Minister Antoine Armand warned Tuesday that stopgap legislation would raise taxes for millions of households and block planned spending increases for some priorities, including security and farming.

Barnier becomes the first French prime minister to lose a no-confidence vote in more than 60 years. The only other premier to be ousted under the Fifth Republic was Georges Pompidou in 1962 and, with the backing of the powerful president, Charles de Gaulle, he was eventually reappointed.