French President Emmanuel Macron is to face a vote of no confidence in the country’s National Assembly, less than 24 hours after his British counterpart faced down her own leadership challenge.
Bloomberg says “while the administration has little chance to lose given its majority, it will force the premier to detail his budgetary plans for 2019”.
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Prime Minister Edouard Philippe will reveal plans for next year’s spending during a keynote speech ahead of Thursday’s confidence vote.
Philippe’s “backing for Macron’s increased spending to defuse the Yellow Vest protest, which may represent about 10 billion euros, could push the deficit up to around 3.4% of gross domestic product, in a signal that containing the month-long crisis will take priority over European Union budget rules”, says Bloomberg.
The Sun says there are fears that concessions by Macron “are set to blow out the French deficit”, with Reuters reporting that France is on course to overshoot the European Union’s budget deficit ceiling next year without new spending cuts after Macron caved in to anti-government street protests.
Among the concessions announced by the president on Monday were a rise in the minimum wage, tax-free overtime pay, a tax cut for pensioners and a freeze of planned fuel tax hikes, due to kick in on 1 January.
“The knock-on effect to the French budget did not go unnoticed by bond markets,” says CNBC.
At one point on Tuesday the spread between France and German ten-year bonds – seen as an indicator of risk sentiment – reached its widest since May 2017.
Ambrose Evans-Pritchard in The Daily Telegraph writes that Macron’s bid to buy off France’s “gilets jaunes” protesters with instant budget handouts “threatens to blast through eurozone’s fiscal limits, fatally damaging his credibility as the champion of the European project and the guardian of French public accounts”.
He adds: “The package of short-term measures announced in a theatrical mea culpa on Monday night leaves President Macron’s putative ‘grand bargain’ with Germany in tatters.”
Macron has insisted he will not back down on his wider reform agenda in the face of the protests.
“Whether that will be enough to avert a so-called ‘Act V’ of demonstrations this weekend remains to be seen - as the concessions have already been written off by some as half-measures,” says The Sun.
The no confidence vote comes just a day after Prime Minister Theresa May faced a no confidence vote from her own party in Westminster. She won the ballot by 200 votes to 117, but has been left in a much weaker position.
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