Transcript: French prime minister faces no-confidence vote

This is an audio transcript of the FT News Briefing podcast episode: ‘French prime minister faces no-confidence vote’

Sonja Hutson
Good morning from the Financial Times. Today is Wednesday, December 4th, and this is your FT News Briefing.

South Korea declared martial law yesterday for a few hours. And France’s prime minister faces a no-confidence vote today over the country’s budget. Plus, military crackdowns in the Sahel region of Africa have failed to stamp out violence. 

Aanu Adeoye
It’s almost impossible to solve this crisis using only military might. It’s almost a pipe dream. 

Sonja Hutson
I’m Sonja Hutson, and here’s the news you need to start your day.

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A power struggle is unfolding in South Korea. Conservative President Yoon Suk Yeol declared martial law yesterday. 

[YOON SUK YEOL SPEAKING IN KOREAN]

Sonja Hutson
He accused left-wing parties of sympathising with North Korea and plotting rebellion. And he pledged to, quote, eliminate anti-state forces everywhere. 

[YOON SUK YEOL SPEAKING IN KOREAN]

Sonja Hutson
Opposition members gathered outside parliament in protest while soldiers stopped them from entering. And then in a dramatic turn, the National Assembly voted to block the law on Wednesday morning. Yoon then backtracked and said he would lift the order. The back and forth is all because Yoon and the opposition have been in a political showdown. The leftwing holds a majority in parliament. Last week, the left voted to cut billions of dollars from Yoon’s budget. And that move was seen as a swipe at his presidency.

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French Prime Minister Michel Barnier faces a critical no-confidence vote in parliament today. It’s one he’s likely to lose. And if he does, Barnier will be removed from power for trying to push through a really unpopular budget, in which case his government will collapse. Here to talk about where that would leave the country’s economy is the FT’s Leila Abboud. Hey, Leila. 

Leila Abboud
Hello. 

Sonja Hutson
OK, so let’s start with some background. Tell me a bit more about this budget that Barnier has been trying to pass and how it’s now threatening his job. 

Leila Abboud
Michel Barnier was only named three months ago, and essentially his first task was to pass the budget. And France, you know, he also took the job at the time where France’s deficits have been widening in a way that is quite bad. So he’s trying to pass a budget which will start reining in those deficits and includes tax hikes and spending cuts. And France is a country where nobody likes to cut spending and everybody howls every time you try and fix the deficit. So he’s in this quite difficult situation. 

Sonja Hutson
And Leila, what are the political forces at play here? 

Leila Abboud
The parliament is badly fractured into three blocks, so nobody has a majority. Barnier and his supporters, the centrists, are sort of sitting between a quite radical far-right bloc led by Marine Le Pen and then a leftist bloc with its main component being a far-left party called France Unbowed. So this just creates a dynamic where it’s pretty hard to get any consensus to pass any laws, which is just led to this sort of impasse on the budget, which Barnier is still trying to overcome. But it looks like he’s not gonna be able to do so. 

Sonja Hutson
Got it. And if Barnier does end up losing today’s vote, where exactly does that leave France’s government and next year’s budget? 

Leila Abboud
Well, the government automatically falls if he loses the vote. So he’s no longer prime minister and the government doesn’t exist. And the budget is just . . . it doesn’t pass. So they have to start over. I mean, if you zoom out a little bit, the consequences are just that France will be stuck in a period of, you know, volatility and instability, which hasn’t happened in a very long time. I mean, just to give you context, the last time a government fell in a no-confidence vote, it was in the ‘60s and it would only be the second time it’s ever happened. So we’re not talking about something that happens a lot, right? I mean, France is not yet like Italy, where their governments fall quite frequently here. It’s quite . . . it’s very rare. 

Sonja Hutson
Wow. OK. So this is just really an eye-opening amount of political uncertainty at the moment. 

Leila Abboud
Yeah. 

Sonja Hutson
I guess I’m wondering, Leila, ultimately, what might that mean for France’s economy? 

Leila Abboud
Nothing good. You know, this whole situation came about because President Emmanuel Macron decided to call early legislative elections over the summer. He had been hoping for what he calls a, quote, clarification of the political scene. And instead, you know, I would argue we ended up with an even worse model than we had before. Ever since then, CEOs, investors, the business community in France is just not happy. Businesses always hate uncertainty and investments, you know, in new factories or hiring, they’ve really slowed since that time. And the sort of messy debate over the budget has also spooked markets in recent weeks. So you’ve seen the spreads between French bonds and German bonds, which is a measure of risk widen. And, you know, there’s a wider economic downturn kind of happening in Europe. Germany’s already in recession. Germany is the biggest trading partner of France. So I’d say that, like the political instability is adding to an already sort of weakening economic background. 

Sonja Hutson
Leila Abboud is the FT’s Paris bureau chief. Thanks, Leila. 

Leila Abboud
Thanks so much for having me. 

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Sonja Hutson
BlackRock said yesterday it would buy the private credit manager, HP Investment Partners. It’s a $12bn deal. The acquisition is part of a new strategy by the group’s CEO to expand into alternative assets. BlackRock has traditionally focused on more publicly traded equities and bonds, but it’s also now one of the largest private capital managers in the world. Private credit funds have attracted hundreds of billions of dollars in recent years. That’s largely thanks to big insurers and pension funds looking for higher-yielding investments. And so BlackRock wants to be a one-stop shop for all types of investors.

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A series of military dictatorships in the African Sahel region came to power on the promise to bring security to their countries. But in the few years since they forcibly took over, these governments have not been able to stop a wave of Islamist and insurgent violence even after turning to Russian mercenaries for help. In fact, fatalities have actually risen. I’m joined now by the FT’s Aanu Adeoye. So just to start off, Aanu, can you give us some quick background on these dictatorships and how they came to power? 

Aanu Adeoye
Sure. Since 2012 started in Mali, there’s been a bunch of insurgent groups such as al-Qaeda and ISIS affiliates who have been attacking army installations, civilian populations. And that has spread from Mali to Burkina Faso and Niger. In response to this, people in these three countries have been frustrated by their governments’ inability to tackle the violence. And many of the militaries in these countries have taken this popular anger against the government as their opportunities to topple the government. So there’s been a wave of coups starting in 2020 where these governments came into power promising to fix things. But I think as we’ve seen, they have not necessarily improved the situation on the ground. 

Sonja Hutson
Yeah. So how much has the violence increased since they took over? 

Aanu Adeoye
So if we look at data from ACLED, which is this non-profit that tracks global conflict in the first half of 2020 for 7,620 people who have died in these three countries. And when you compare this to 2021, that’s a staggering 190 per cent jump in fatalities. And we might be on track to beat also a terrible record that was set last year. 

Sonja Hutson
So we mentioned that Russian mercenaries are working on behalf of these dictatorships to help curb some of this violence. Why turn to them? 

Aanu Adeoye
Some context is that these three countries were formally colonised by France. So, you know, France has always had a huge influence. And these three military dictatorships came to power. There was a massive wave of anti-French sentiment because people were frustrated by the ability of the French forces and their western partners to root out the violence. This military regimes have basically turned to Russia, Wagner group. They’ve kicked out French forces. And they believe that the Russians are going to help them go up aggressively against these insurgent groups. 

Sonja Hutson
It seems like based on the data that you were sharing earlier about the rise in violence, that this turn to using Russian mercenaries has not really worked. Why is that? 

Aanu Adeoye
I think these are very complicated issues. There’s issues of poverty. That means that there’s a lot of young men that are very easy to recruit into these insurgent groups. And I think, you know, there’s this consensus among people who look at this stuff that it’s almost impossible to solve this crisis using only military might. It’s almost a pipe dream. 

Sonja Hutson
So Aanu, what does this huge rise in violence plus the inability to tackle it mean for the Sahel region going forward? 

Aanu Adeoye
I think it’s grim, to be honest. You know, a lot of these regimes came into power promising to improve things. So in some way, they have popular support. But I think they know that the same anger that drove people to oppose the democratic government will inevitably come for them if they do not improve things. So, unfortunately, we’ve seen more repression in these countries. And I think if they don’t get a handle on the situation and try to begin to tackle the crisis, unfortunately, I think things will only get worse. 

Sonja Hutson
Aanu Adeoye is the FT’s west Africa correspondent. Thanks Aanu. 

Aanu Adeoye
Thanks for having me. 

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Sonja Hutson
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You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back tomorrow for the latest business news.