France Gets Caretaker Government With Exact Remit Unclear
(Bloomberg) -- French President Emmanuel Macron appointed a caretaker government on Tuesday until negotiations to find a new prime minister bear fruit.
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Macron formally accepted the resignation of Prime Minister Gabriel Attal on behalf of the government. However, Attal will stay on at the helm of a caretaker administration, with weakened powers, until such time as his successor is appointed by Macron.
“In order to make this period as short as possible, it is incumbent on the republican forces to work together to unite around projects and actions that serve the French people,” Macron’s office said in a statement.
Speaking on French TV channel TF1 late Tuesday, Attal said Macron signaled that the situation could last several weeks. In the meantime, he said the government will come up with proposals and compromises to build a majority in the lower house.
“In the next few days, we’ll be launching a political initiative, putting forward proposals for an action pact for the French people,” he said. “We hope to engage that work with the other political groups, except the extremes.”
The president made the move to ensure his ministers can participate in a parliamentary vote on Thursday to select the head of the National Assembly, who organizes and leads debates in the lower house, appoints administrative authorities and is consulted in times of crisis. Sitting ministers who are also lawmakers aren’t allowed to take part in this vote.
What’s a caretaker government?
The caretaker government is supposed to handle daily business and/or emergencies. But it is unable to hold cabinet meetings, bring new bills or adopt budget measures. If it does move to initiate legislation, the measures could be canceled by an administrative court judge — but it’s not a given, as there is no clear definition of the notion.
The caretaker administration will stay in place until such time as a new government is appointed, according to Melody Mock-Gruet, a legal expert who teaches at Sciences Po.
How long can this situation last?
According to constitutional experts, the caretaker government cannot be brought down by a no-confidence vote, and is subject to no specific time limit. But it can’t last forever either: In September, parliament is supposed to discuss a budget law for 2025. Parliamentary business is also complicated in unprecedented ways by the fact that Paris hosts the Olympics this month.
So what’s next?
Macron gambled when he called snap elections last month after his defeat in European Parliament voting. His coalition lost more than 80 seats in the Assembly, while Marine Le Pen made her strongest showing to date with 143 seats for her far-right group. But the biggest bloc is the left-wing New Popular Front, which says it wants to govern but is struggling to pick a premier as moderate socialists spar with Greens, Communists and the far-left France Unbowed to agree on a candidate.
According to the French constitution, it’s the president who names the prime minister. While Macron has no obligation to choose a member of the biggest group in parliament, he’s likely to choose somebody with broad appeal whom he hopes won’t be vulnerable to a no-confidence motion, and who could build majorities on a case-by-case basis to pass legislation. The French leader, who is legally barred from calling fresh election for at least a year, has repeatedly ruled out resigning before the end of his mandate in 2027.
What does it all mean for investors?
With no party commanding an absolute majority in the National Assembly, it may prove hard to undo Macron’s pro-business legacy, which includes a flat tax on capital gains and largely scrapping the wealth tax. While the Left won the largest number of seats, they still don’t have enough to enact their program, which includes boosting the minimum wage and rolling back Macron’s pension reform.
There’s still a risk that whichever government is in place in September may face a no-confidence vote over the budget. That could force it to basically run on autopilot for the coming months — perhaps the least worst outcome for investors.
--With assistance from William Horobin.
(Updates with Attal comments from fourth paragraph)
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