France’s major far-right party is ready to take down Michel Barnier’s government after he declined to meet all of their demands for next year’s budget. The breakdown was sparked by a move by Barnier to use a constitutional mechanism that allows for the adoption of the social security bill without a vote. Marine Le Pen’s National Rally party, the largest in the lower house of parliament, said it’s ready to back a no-confidence motion. And since a left-wing coalition is set to propose one, it’s very likely to pass. The uncertainty has continued to unsettle French markets, pushing bond investors to punish its sovereign debt relative to its peers, and sending the euro down 1% against the dollar. The drama will play out over the next few days, and if Barnier’s government falls, an already embattled President Emmanuel Macron will have to find a new prime minister.
Roughly 66,000 Volkswagen workers walked out of plants across Germany amid a stalemate in talks between labor leaders and management. These are warning strikes, designed to add pressure to those talks. The two sides remain at loggerheads over how to cope with a drop in demand for electric vehicles, higher operational costs and increasing competition from Chinese manufacturers. (Watch our Bloomberg Originals mini-documentary on how VW has lost its way.) Other European carmakers are reeling too. Stellantis shares plummeted as much as 8.9% after CEO Carlos Tavares unexpectedly quit. Facing many of the same challenges as VW, Stellantis is under pressure to halt a sales slide in the US and tackle overcapacities in Europe.
