Summary: France’s government fell after Prime Minister François Bayrou lost a confidence vote over deficit‑cutting plans. President Emmanuel Macron named Sébastien Lecornu as the new prime minister. Hours later, Fitch downgraded France’s sovereign rating to A+, citing political turmoil and an unclear path to debt stabilisation.
What happened
Bayrou’s fiscal package failed to win support in a fragmented National Assembly. Lecornu took office promising to find votes for a slimmer budget. Fitch’s downgrade underscored the market risk around France’s high deficit and debt trajectory.
Why it matters
- Budget math meets politics: Without a stable majority, passing a credible 2026 budget will be hard—raising borrowing‑cost and EU rule‑compliance risks.
- Contagion channel: A wider France–Germany spread would ripple into bank funding and corporate issuance across the eurozone.
Key facts
- Confidence vote defeat: Sept 8.
- New PM: Sébastien Lecornu sworn in Sept 10.
- Rating action: Fitch cut to A+ on Sept 12.
What to watch
Draft budget details and coalition arithmetic; whether other agencies follow Fitch; market reaction in OAT–Bund spreads.