Michel Barnier's French government faces collapse as opposition backs no-confidence vote

Rival politicians have 24 hours to put forward no-confidence motions against fragile ruling coalition

French Prime Minister Michel Barnier addresses the French Parliament in Paris on Monday. EPA

The French government is facing collapse after far-right and left-wing parties said they would vote in favour of a no-confidence motion against Prime Minister Michel Barnier.

The latest developments have plunged the eurozone's second-biggest economy deeper into political crisis as investors immediately punished French stocks and bonds.

"The French have had enough," National Rally (RN) leader Marine Le Pen said. Her party would put forward its own no-confidence motion and vote for any similar bill by other parties, she added. The left vowed to propose a similar motion.

"Maybe [voters] thought with Michel Barnier things would get better but they got even worse."

Government could be ousted by no-confidence vote for first time since 1962

Barring a last-minute surprise, Mr Barnier's coalition will be the first French government to be forced out by a no-confidence vote since 1962.

A government collapse would leave a hole at the heart of Europe, with Germany also in election mode, weeks ahead of Donald Trump re-entering the White House across the Atlantic.

RN politicians and the left combined would have enough votes to topple Mr Barnier. They now have 24 hours to put forward their no-confidence motions.

RN party leader Marine Le Pen talks to journalists after a French National Assembly debate on Monday. EPA

Social security bill divides parliament

Their comments came after Mr Barnier said on Monday that he would try to ram a social security bill through parliament without a vote after a last-minute concession proved insufficient to win RN's support.

French stocks reversed course, while a sell-off in the euro gathered pace and bonds came under pressure, pushing up yields.

The CAC 40 was last down 0.6 per cent, having risen by as much as 0.6 per cent after Mr Barnier's concessions. The euro fell 1 per cent and was heading for its largest one-day drop since early November. The yield on French government 10-year debt was up 2.7 basis points to 2.923 per cent, having traded at a session low of 2.861 per cent earlier.

Barnier urges politicians not to back no-confidence vote

"Faced with this umpteenth denial of democracy, we will censure the government ... we are living in political chaos because of Michel Barnier's government and Emmanuel Macron's presidency," said Mathilde Panot of the left-wing France Unbowed.

Mr Barnier urged politicians not to back the no-confidence vote. "We are at a moment of truth ... the French will not forgive us for putting the interests of individuals before the future of the country," he said as he put his government's fate in the hands of the divided parliament, which was the result of an inconclusive snap election Mr Macron called in June.

Since it was formed in September, Mr Barnier's minority government has relied on RN support for survival. The budget bill, which seeks to rein in France's rising public deficit through €60 billion ($63 billion) in tax increases and spending cuts, snapped that tenuous link.

Mr Barnier's entourage and Ms Le Pen's camp each blamed the other and said they had done all they could to reach a deal and had been open to dialogue.

A source close to Mr Barnier said the Prime Minister had made major concessions to Ms Le Pen and voting to bring down the government would mean losing those gains. "Is she ready to sacrifice all the wins she got?" the source told Reuters.