Michel Barnier the French Prime Minister has been ousted from government in a no confidence vote.
It is the first time the French government has collapsed in a no-confidence vote since 1962.
It throws the European Union’s second biggest economic power into political turmoil.
French far-right leader Marine Le Pen said pressure on President Emmanuel Macron is mounting following the vote but said she is not calling on his resignation.
Macron confirmed he will give a televised speech to the nation at 8pm local time (7pm GMT) on Thursday.
The French President just returned to France following a state visit to Saudi Arabia and has previously said he would not resign whatever the outcome of Wednesday’s vote.
Barnier has been ousted after left and far right parties united to vote in support of a motion of no confidence.
The vote of no confidence was passed by 331 votes and 288 were needed for the motion to pass.
MPs could not vote against it and could only vote for, or abstain.
This latest development comes just weeks before Donald Trump is set to become US President and while Germany grapples with the implosion of a coalition government.
France was plunged into political chaos this summer when President Emmanuel Macron called a surprise snap election.
Both the left and far right punished Barnier for opting to use special constitutional powers to ram part of an unpopular budget.
This was controversial because it sought 60 billion euros in savings in an effort to shrink the deficit, through parliament without a final vote.
Marine Le Pen said collapsing the government was ‘the only way the constitution gives us to protect the French from a dangerous, unfair and punitive budget’.
The country is now faced with political uncertainty and it is unnerving investors in French sovereign bonds and stocks.
France’s borrowing costs briefly exceeded those of Greece, generally considered far more risky earlier this week.
Macron will now aim to install a new prime minister swiftly, according to Reuters.
A source said he wanted to name a new prime minister before a ceremony to reopen the Notre-Dame Cathedral on Saturday that Trump is due to attend.
But a new prime minister would face the same challenges as Barnier.
This includes getting bills, including the 2025 budget, adopted by a divided parliament. There can be no new parliamentary election before July.
Macron could also ask Barnier and his ministers to stay on in a caretaker capacity.
This will give him time to identify a prime minister able to attract sufficient cross-party support to pass legislation.
The danger for Macron is that his opponents vote down one prime minister after the next and his rivals are calling on him to resign.
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