French Prime Minister Sébastien Lecornu Resigns, Deepening Political and Economic Instability

France is once again navigating a period of profound political and economic uncertainty following the resignation of Prime Minister Sébastien Lecornu on October 6, 2025. His departure, occurring less than a month after his appointment on September 9, 2025 and mere days after unveiling his new cabinet, marks the third prime ministerial change in under a year, intensifying concerns about the nation's governance and fiscal health. Lecornu's brief tenure followed the resignation of his predecessor, François Bayrou, who lost a confidence vote in the National Assembly due to proposed austerity measures, including the cancellation of two public holidays,. The newly formed cabinet, which included the controversial appointment of former Finance Minister Bruno Le Maire as Defense Minister, faced immediate criticism. Lecornu stated that he was resigning because 'the conditions for stability and action are no longer met,' blaming 'partisan attitudes' and 'certain egos.' This contributing to the instability that has plagued French politics since the 2024 snap legislative elections resulted in a fragmented parliament. This political volatility has created a challenging environment for addressing the country's significant economic headwinds.

The immediate aftermath of Lecornu's resignation saw a palpable reaction in financial markets. The CAC 40 index, a key benchmark for French equities, experienced a sharp decline, falling by nearly 2% on October 6, 2025. Simultaneously, the yield on France's 10-year government bonds saw an increase, rising to approximately 3.57% on the same day, a level nearing a 14-year high. This trend indicates growing investor apprehension regarding France's economic stability and its ability to manage its substantial debt burden. The spread between French and German 10-year bond yields widened significantly, reflecting increased perceived risk.

France is grappling with substantial fiscal challenges. The nation's budget deficit reached €168.6 billion in 2024, representing approximately 5.8% of its economic output, a figure that has been revised upwards from initial projections. Furthermore, France's sovereign debt surpassed €3.4 trillion as of September 2025, placing it among the highest in the eurozone. This precarious fiscal situation, exacerbated by the rapid succession of prime ministers, raises critical questions about the government's capacity to implement necessary reforms and maintain investor confidence. The nation's debt-to-GDP ratio stands as one of the highest in the European Union, significantly exceeding the 60% threshold stipulated by EU rules.

President Emmanuel Macron now faces the daunting task of appointing yet another prime minister, tasked with the immense challenge of uniting a fractured legislature and steering the nation through its current economic and political turbulence. The ongoing instability raises concerns about France's ability to address its looming financial challenges and maintain its position within the eurozone. The rapid turnover of leadership underscores a deeper systemic issue, where the fundamental arithmetic of a divided parliament makes sustained governance exceptionally difficult. As France confronts these multifaceted challenges, the focus remains on who will emerge to lead and whether they can forge a path toward stability and economic recovery.