Will France have a government (and a budget) for Christmas?

The far-right National Rally threaten ed to bring down the government by year end . Ms Le Pen, the National Rally leader , stated that some “red lines” have been crossed by the government , especially regarding concerns over household s’ purchasing power that are not included in the 2025 budget. P rime M inister Barnier indicated he will “likely” use article 49.3 to pass the budget ( ie without the vote of the Parliament ) between December 18 and 20 . W e thus see a clear risk of a no confidence vote in this period. In this paper, w e try to assess the rationale arguments that could lead the National Rally to dismiss the government or let the budget pass before year end . H owever, we should remember politics is not always rational (and that emotions can dictate the course of action) . Our baseline scenario remains that the Budget will pass before year end thanks to article 49.3 despite a growing risk of a successful no confidence vote. W e also identify three other risks the market should not underestimate.