Sebastien Lecornu, France’s prime minister, during the handover ceremony at the Hotel Matignon in Paris, France, on Wednesday, Sept. 10, 2025.
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France’s new Prime Minister Sebastien Lecornu has resigned just weeks after his appointment, plunging the country into a fresh political crisis.
French markets have reacted strongly to the news this morning, with the yield on the 30-year government bond, or OAT, hitting a one-month high of 4.441% before retreating slightly. The yield on the benchmark 10-year bond rose to a 10-day high of 3.5990%. Meanwhile, France’s CAC 40 index slumped 1.9% and the euro fell 0.7% against the dollar.
Lecornu, France’s fifth PM in less than two years, had his work cut out to convince the country — and investors — that he could unite a fractious and divided parliament enough to get a 2026 budget over the line.
He was installed in early September against a backdrop of public unrest and dissatisfaction over the messy state of French affairs, after several successive governments failed to pass budgets detailing spending cuts and tax rises.
A former defense minister and longtime ally of French President Emmanuel Macron, Lecornu resigned just houses after naming a new cabinet on Sunday. The new cabinet, which saw most high-profile figures remain in their posts, was due to hold its first meeting on Monday.
Now, France has been plunged into a new political crisis which will put massive pressure on Macron, who has now installed three failed minority governments.
Lecornu was due to make a speech in front of parliament, the National Assembly, on Tuesday laying out his government’s roadmap.
Parties on both the left and right of the political spectrum in France were watching closely, as were investors and the European Commission in Brussels, to see how Lecornu planned to close a budget deficit of 5.8% in 2024. France’s debt pile amounted to 113% of GDP in 2024.
Both levels are far above EU rules demanding that individual members’ deficits should not exceed 3% of GDP, while their public debt should not surpass 60% of economic output.
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