France could find itself heading for another snap parliamentary election, a government minister suggested on Tuesday, after opposition parties said they would vote to oust Prime Minister François Bayrou and as French markets tumbled.

Bayrou jolted the political establishment out of its summer slumber on Monday with his unexpected move to seek a September 8 confidence vote on his debt-cutting plan – but opposition parties quickly made clear they would vote against him and his minority government.

The far-right National Rally, the Greens, the hard-left France Unbowed and later the Socialists, on whose vote Bayrou's fate largely lies, said they did not see how they could back him.

Why has Bayrou called this vote?

Bayrou said the confidence vote would gauge whether he had enough support in parliament for his $51 billion budget squeeze, as he tries to tame a deficit that hit 5.8 percent of gross domestic product last year, nearly double the official EU limit of 3 percent.

Even if the government wins the confidence vote, it would only mean he has support for his views on France's fiscal woes, with a vote on the actual budget itself due later in the year.

Bayrou has proposed scrapping two public holidays and freezing welfare spending and tax brackets in 2026 at 2025 levels, not adjusting them for inflation. He said his proposal to scrap the bank holidays could be tweaked.

What happens if Bayrou loses the vote?

If Bayrou loses the confidence vote in the National Assembly, his government will fall. 

President Emmanuel Macron could name a new prime minister immediately, or ask Bayrou to stay on as head of a caretaker government, or he could call a snap election.

Macron lost his last prime minister, Michel Barnier, to a no-confidence vote over the budget in late 2024, after just three months in office following another snap election in July that year.

Macron had said that mid-2024 election would bring "clarity" – the very same words used by Bayrou on Monday to explain why he was holding a confidence vote. But it only resulted in a more fragmented parliament, bringing no clarity at all.

Bayrou acknowledged seeking the confidence of a very fragmented parliament was a risky bet.

"Yes, it's risky, but it's even riskier not to do anything," he told a press conference, referring to what he said was the major danger the country faced due to its huge debt pile.

How have politicians reacted?

Macron, who is the only person who can dissolve parliament and launch fresh legislative elections, has yet to comment on Bayrou's move, although Bayrou's entourage said on Monday that Macron had signed off on the plan.

Justice Minister Gerald Darmanin told France 2 TV that while the government was still working on trying to find a compromise agreement, he "could not rule out" the scenario of another costly dissolution of parliament.

Finance Minister Eric Lombard said the government was still hoping to reach a last-minute deal with the opposition – but from the far right to the hard left, opponents made clear that was unlikely to happen.

Jordan Bardella, president of the far-right National Rally,  said Bayrou had de facto announced "the end of his government" by calling for the vote.

"The RN will never vote in favour of a government whose decisions are making the French people suffer," he said on X. Leader Marine Le Pen said the RN would vote against Bayrou – as did the Greens.

The hard-left France Unbowed also said the vote would mark the end of the government, with leader Jean-Luc Melenchon going even further to call for the resignation of Macron himself.

"Emmanuel Macron must go. He is responsible for the crisis," Melenchon wrote on X.

While those on the far right and far left of France's widely-dispersed, deeply divided political spectrum have long made clear their distaste for Bayrou, he also seems to have lost the crucial backing of more centrist lawmakers in the Socialist party. 

If the Socialists join other left-wing parties and the far right in voting against the government, there will likely be enough votes to oust it – and party leader Olivier Faure told TF1 television that Socialists would not vote in favor of the confidence motion.

Leading Socialist lawmaker Boris Vallaud wrote on X: "We need a different Prime Minister and, above all, a different policy." 

How have the markets reacted? 

France's blue chip CAC40 index was down nearly 2 percent in early trade on Tuesday, having fallen 1.6 percent late on Monday. France's 10-year bond yield rose around 3 basis points in early trade to around 3.52 percent, its highest since March. When a bond's yield rises, its price falls.

Asked about comments by other politicians that a collapse of Bayrou's government could result in the International Monetary Fund having to intervene in France's finances, Lombard replied: "This is a risk that is in front of us."

"It is a risk that we would like to avoid, and one which we should avoid, but I cannot tell you that this risk does not exist," he added.

The IMF usually only offers financial support to countries that find themselves shut out of financial markets due to dire budget crises, and even then only on condition of making serious reforms. France is very far from being in that situation.

The confidence vote will take place just two days before planned protests, which have been called for on social media and backed by leftist parties and some unions.

The September 10 call for general protests has drawn comparisons to the Yellow Vest protests that erupted in 2018 over fuel price hikes and the high cost of living.

The "gilets jaunes" protests spiraled into a broader movement against Macron and his efforts at economic reform.