Disarray in France and Germany is 'bad news' for EU

Wednesday was a long day for France's shortest-ever serving prime minister. In the evening, 73-year-old Michel Barnier's minority government was toppled in a no-confidence vote in the French lower house, the National Assembly, that saw sworn enemies from the left and the far-right team up against him.

"This no-confidence motion will make everything more serious and more difficult. That's what I'm sure of," Barnier said ahead of the vote. On Thursday morning, he officially tendered his resignation. He will continue as acting prime minister until a new government is formed.

French President Emmanuel Macron wasted no time seeking a replacement; within hours he was seeing candidates. Not for the first time Macron, whose second and final presidential term expires in 2027, is batting away calls to resign himself.

What's next for France?

Macron appointed Barnier out of the blue in September to end months of political uncertainty. The president had called snap legislative elections that in July left the National Assembly divided into three camps, none strong enough to govern alone.

A broad left-wing coalition, the New Popular Front, won the polls, but the far-right National Rally party of Marine Le Pen won the most votes as a single party.

Macron's pro-business centrist Ensemble group did not want to work with either. So instead, they formed a minority government with Barnier's right-wing Republican party despite its historically poor performance in the parliamentary polls.

In office, old-hand conservative Barnier made France's finances one of his top priorities. At 6.1% this year, the French gross domestic product-to-debt ratio is twice as high as EU rules allow; the country is among several EU states to be officially reprimanded by the European Commission.

Barnier proposed a 2025 budget and social security reform that would have brought down public debt but necessitated tax hikes and spending cuts which the left and far-right slammed as austerity measures neglectful of citizens' needs. He presented parliament with a choice: vote for this budget or the government falls. They chose the latter, triggering the no-confidence motion that toppled him.

Headcount is unchanged in National Assembly

It is unclear what lies ahead for France, which is in an era of political volatility unprecedented since the end of the World War II.
The balance of power in the National Assembly remains the same. It is divided into three blocs that are reluctant to enter coalition with each other. Government formation looks just as difficult as it did in July. Macron has made clear he will stay, and fresh legislative polls can't be called until mid-2025.

Whoever follows Barnier as prime minister will be in a similarly weak position, struggling to get their political vision approved by the French parliament. Under the country's presidential system, most power is concentrated in Macron's hands, though he appears to have an ever-loosening grip.

Tough times ahead for Paris and Berlin

For Europe, all this likely means a more preoccupied France, and a potential slowdown of important collective decisions. 

"We need a French government that works for European legislation to also pass through, so the quicker we get a government the better," Sophie Pornschlegel of the Jacques Delors Centre, a think tank in Berlin, told DW.

France's three-month stint without a government before Barnier's appointment didn't cause too many issues, she pointed out, but that period was less crucial because the new European Commission had not yet taken office.

But Pornschlegel also warned against being too alarmist: "There's also possibility that it's not that much of a huge political crisis because they relatively quickly form a new government." 

At the same time, Germany is also somewhat out of action. Chancellor Olaf Scholz called time on his uncomfortable coalition government last month, with elections set for February. A new government should take office in Berlin by June. Until then, the government is likely to refrain from bold policy decisions.

"It's bad news. What we need in times of crisis and times of geopolitical turmoil is to have strong and stable leadership," Pornschlegel said.

Germany and France also face a bleak economic outlook. In November, investment bank Goldman Sachs predicted that both countries ― the two largest economies in the Eurozone ― would contract economically in 2025, though the closely interlinked single market as a whole would swerve recession.

"Despite those challenges, economic activity data for the euro areaindicates modest but positive growth," economist Sven Jari Stehn wrote.

Trump 2.0 on the horizon

Paris and Berlin are normally deemed the key axis of power in the European Union, driving policy and setting the main contours of the 27-member bloc's agenda. Their preoccupations at home come at a critical moment.

In January, Donald Trump will return to the White House a for a second term as US president. For the EU, that likely means a return of escalating tit-for-tat tariffs, which spell bad news for the German auto industry in particular.

Within NATO, European states can expect regular blasting from Washington for lower defense spending that amounts to perceived free-riding on US military might. Trump has previously threatened to leave NATO members under attack to fend for themselves if they hadn't spent enough on their militaries.

The "America First" Republican president-elect has also said he will quickly wrap up the Ukraine war by pushing Kyiv to negotiate with Moscow. If Trump withdraws US military support for Ukraine, the EU will be under pressure to dig very deep to fill the gap.

For Pawel Zerka of the European Council on Foreign Relations, regardless of what's going on in Paris and Berlin, Trump's return means others must step up.

"Europeans simply need to take a greater share of the burden when it comes to defending Europe and supporting Ukraine," he told DW.

"Surely, a weakened French participation in these discussions will be felt. But this simply means other countries will need to take a greater role, leave the shade and their comfort zones."

Edited by: Carla Bleiker