The French government experienced a collapse on Wednesday as Prime Minister Michel Barnier was removed after a no-confidence vote in Parliament, rekindling a political crisis that began during the summer as the nation looks ahead to the upcoming year.

With 331 of the 577 members of France’s National Assembly voting against him, Barnier is anticipated to tender his resignation.

Appointed by President Emmanuel Macron in September following a July parliamentary election that resulted in a stalemate, Barnier’s departure marks the shortest premiership in recent French history.

This situation leaves the second-largest economy in the European Union with a caretaker government that may struggle to tackle a growing budget crisis, which is concerning for financial markets.

Here’s a quick overview of the circumstances.

What’s Prompting This Now?

Challenges emerged when Barnier, a conservative figure, was appointed by Macron, a centrist, to head a minority government after Macron’s attempt at a snap election resulted in a deadlock. In the National Assembly, both Barnier and Macron were outvoted by a left-wing coalition and a right-wing faction led by Marine Le Pen.

“The choice we made was to protect the French,” Le Pen explained regarding the vote’s outcome.

Both leftist and rightist lawmakers expressed dissatisfaction with Barnier’s suggested tax increases and spending cuts aimed at curbing France’s deficit. He utilized special powers to push through a budget bill concerning welfare that did not undergo a parliamentary vote. Barnier has become the first prime minister to be dismissed since 1962, with his term ending up being the shortest since 1958.

What’s Next?

There won’t be an immediate new parliamentary election. France’s constitution prevents Macron from calling for another vote until this coming summer.

However, Macron might initiate discussions with various political factions to identify a new prime minister. Previously, when Macron appointed Barnier, he chose a seasoned politician outside the coalition that won the most seats in the election—led by leftist Jean-Luc Melenchon.

Following the vote, Melenchon remarked that it was “inevitable” for Barnier’s government to be overthrown, adding, “Even if there’s a Barnier every three months, Macron will not endure for three years,” referring to Macron’s remaining presidential term.

France is likely to face political and economic instability in the coming weeks and months.

Investors may respond negatively to French stocks and bonds, potentially causing a ripple effect in other parts of the EU due to France’s substantial national debt of about $3 trillion, according to the French National Institute of Statistics and Economic Studies. Nevertheless, government operations won’t cease completely, as Barnier is expected to remain in a caretaker capacity until a new prime minister is found.

Macron’s Approval Rating: What’s Next for Him?

Macron will stay in his position until 2027 unless he chooses to resign, which he has stated he will not do. While the prime minister oversees daily government functions, proposing and ensuring laws are enacted, the president handles defense and foreign affairs, though there’s some overlap in responsibilities.

Macron faces significant unpopularity within France. The forthcoming Paris Olympics and the reopening of the Notre-Dame cathedral, which nearly faced destruction in a fire five years ago, provide him with some positive developments. However, he remains caught between rising far-right sentiments advocating for reduced immigration, and leftist discontent regarding his welfare reforms, among other issues. Many analysts suggest this crisis reflects largely on Macron’s own decisions.

Jean-Yves Camus, a political scientist affiliated with the French Institute for International and Strategic Affairs, stated that Barnier’s exit serves as a clear indication that Macron’s choice to call a snap election last spring was ultimately misguided.