Paris stock market climbs despite government collapse

The Paris stock market rose at the start of trading Thursday, December 5, as President Emmanuel Macron seeks a way out of France’s political crisis. The Paris CAC 40 index won 0.4% to 7,328.79 points and the euro advanced 0.3% versus the dollar. Frankfurt’s DAX edged up 0.1% to 20,255.25 points and outside the eurozone, London‘s FTSE 100 was flat at 8,337.22.

“Markets remain calm for now, but if the far left and right succeed in eventually toppling Macron as president then we can expect a fresh round of jitters in French yields, the CAC40 and the euro,” predicted Chris Beauchamp, chief market analyst at online trading platform IG.

French lawmakers on Wednesday voted to oust the government of Prime Minister Michel Barnier after just three months in office, a historic move that hurled the country further into political uncertainty.

For the first time in more than 60 years, the lower-house Assemblée Nationale toppled the incumbent government, approving a no-confidence motion that had been proposed by the hard left that was crucially backed by the far right.

Barnier’s rapid ejection from office comes after snap parliamentary elections this summer, which resulted in a hung parliament with no party having an overall majority and the far right holding the key to the government’s survival.

Macron now has the difficult task of picking a viable successor with over two years of his presidential term left. He is to address the nation at 8 pm French time on Thursday, the Elysée said. Earlier in the day, Macron is to receive Barnier at 10 am, when he is expected to expect his government’s resignation.