France's Emmanuel Macron had originally scheduled Friday (October 10) for a head of government election aimed at selecting a leader to lead the country out of political deadlock, a move that temporarily avoided a new round of elections.



French politics have been deadlocked since Macron risked a snap election last year - a move he hoped would consolidate power but which instead resulted in a hung parliament and a surge in seats for the far right.

Sources familiar with the matter revealed that Macron was originally scheduled to meet with leaders of all political parties except the far-right National Rally and the radical left-wing France Indomitable Party at the presidential palace at 20:30 Beijing time on Friday.

Macron's office said he would choose a new prime minister on Friday evening after his seventh premier, Sebastien Le Cornu, resigned on Monday after months of deadlock over an austerity budget.

The centrist president, who is facing his worst domestic crisis since taking office in 2017, has yet to address the public.

Lecorni, a Macron loyalist who agreed to stay on for two more days to consult with the political parties, told French television late on Wednesday that he was optimistic the new cabinet could get the spending bill through parliament.

His two predecessors stepped down amid deadlock over spending bills, and his new Cabinet, unveiled Sunday, was criticized for failing to make a clean break with the past.

Le Corneille, who served as defense minister for three years, did not reveal his candidate for the next prime minister.

He claims his mission is complete, but some politicians believe the president may risk angering the opposition and triggering another no-confidence vote by reappointing him.

Others suggest that Bolo, who served as a minister under right-wing presidents Jacques Chirac and Nicolas Sarkozy, could be a potential candidate.

But the 74-year-old centrist said Thursday he had no knowledge of the matter and had "zero" contact with the president's office.

Would former Socialist Prime Minister Bernard Cazeneuve be the right person, or could another Socialist, Pierre Moscovici, head of France's Supreme Audit Institution, help put the country's finances in order?

Shouldn't you have ambition?

Le Corneille said the revised draft budget for 2026 could be submitted to the Council of Ministers for consideration next Monday, the deadline for the bill to be passed by parliament before the end of this year.

This means the new cabinet will be announced before the end of the week.

Lekoni proposed on Wednesday that a more technocratic government could be appointed whose members should not have "ambitions" to run in the 2027 presidential election.

As the crisis escalated, even former allies began to criticize the president.

Former Prime Minister Edouard Philippe, a contender in the next presidential election, said earlier this week that Macron should step down after the budget is passed. But Macron has insisted on staying in office until the end of his term.

Far-right leader Marine Le Pen refused to participate in the consultations initiated by Lecorni this week. She said on Wednesday that she would obstruct all measures of the new government and "vote against all bills."

Marine Le Pen's anti-immigration National Rally party believes that with Macron having completed two presidential terms, the 2027 general election will be the party's best historical opportunity to come to power.

Marine Le Pen was banned from running after being convicted of corruption, but her 30-year-old deputy, Jordan Bardella, could be a replacement.

Analysis of potential impact on the euro

The formation of a new government rather than early elections temporarily eliminated the immediate risk of far-right forces gaining further strength through votes, easing market concerns about political chaos in the eurozone's second-largest economy. This provided short-term breathing space for the euro and motivation for short-covering .

Former Prime Minister Le Cornu's proposal to form a technical government "without political ambitions", if realized, may be seen as a pragmatic signal of commitment to solving fiscal problems and help stabilize market sentiment.

Even if a new government is formed, its ability to push through legislation in a hung parliament remains in doubt. Le Corneille's two predecessors both resigned due to budget deadlocks, and whether the new government can break this deadlock will be key to assessing the euro's medium- and long-term trajectory.

National Rally leader Marine Le Pen has made it clear that she will "vote against all proposals," meaning any major legislation by the new government will face significant obstacles. This ongoing internal political confrontation will hinder France's ability to implement necessary reforms and put continued pressure on the underlying value of the euro .

Macron has become a lame duck president, his political influence waning. Political forces, particularly the far right, have completely shifted their focus to the 2027 elections. The next three years of French politics will be fraught with internal friction, long-term undermining the euro's political foundation as a unified currency .

Under pressure from political compromise, any government may find it difficult to implement strict fiscal austerity. Markets will closely monitor whether the revised draft budget for 2026 demonstrates sufficient fiscal discipline. A disappointing outcome could push up the interest rate gap between French and German government bonds again, putting pressure on the euro.

The market reacted significantly during the European trading session on Friday. The euro did not continue the downward trend of the previous four trading days against the US dollar, but strengthened slightly, reflecting the basic support for the euro.

At 16:27 Beijing time, the euro was trading at 1.1586/87 against the US dollar.