French Downgrade Sets Tone for Macron’s New Premier

Francois Bayrou, the 73-year-old also-ran of French politics with three failed presidential bids under his belt, has been named prime minister by Emmanuel Macron at a time of stagnating growth, parliamentary gridlock and yet another credit-rating downgrade. It’s a choice that might once have seemed a bad joke — Michel Houellebecq’s 2015 novel Submission imagined Bayrou as an ineffectual premier in a dystopian France – yet it speaks to how scrambled things have become.

Macron has had to act fast after the toppling of Michel Barnier, another 73-year-old whose conservative politics and push for austerity angered the left and failed to pacify the far-right. France now has no budget, no government, no parliamentary majority and no path to fresh elections until late next year, right as €350 billion ($368 billion) in debt and €40 billion in interest fall due — adding up to a fragile state for Europe’s No. 2 economy. Moody’s downgraded France’s credit rating just hours after Bayrou’s acceptance speech, warning that the country's debt load was rising and chances of meaningful deficit reduction were now “very low.” Nobody expects miracles, least of all financial markets, where the vibe is still deeply skeptical.