France’s economy is paying a steep price for its deepening political instability. With three prime ministers installed since last summer—including the newly appointed Sébastien Lecornu—the nation’s markets, businesses, and international investors are growing increasingly wary of what comes next .
The French economy, once seen as a resilient pillar of the eurozone, is now showing signs of strain. From stalled reforms to investor uncertainty and slowing growth, the fallout from relentless government turnover is becoming impossible to ignore.
Political Whiplash: A Timeline of Instability
Since July 2024, France has cycled through three different prime ministers:
- Élisabeth Borne – Resigned in July 2024 after losing parliamentary support over pension reforms.
- Michel Barnier – Appointed in August 2024 but ousted by a no-confidence vote in September 2025.
- Sébastien Lecornu – Sworn in October 2025 amid renewed efforts to stabilize the government.
This revolving door at Matignon (the PM’s official residence) has left ministries in disarray, delayed key legislation, and eroded confidence in France’s ability to govern effectively.
How the French Economy Is Suffering
Economic indicators tell a troubling story:
- GDP growth has slowed to just 0.7% in Q3 2025—the weakest in two years.
- Business investment dropped 4.2% year-over-year as companies hold off on expansion plans.
- The euro dipped against major currencies following news of another cabinet crisis.
- OECD recently downgraded France’s 2026 growth forecast from 1.4% to 1.0%.
Investor Confidence Hits a Low
“You can’t run a modern economy on political quicksand,” said Claire Dubois, chief economist at Paris-based Banque Laurent. “Every time a new prime minister walks in, policy priorities shift, budgets get rewritten, and long-term planning goes out the window.”
Foreign direct investment (FDI) into France fell by 12% in the first nine months of 2025 compared to the same period last year—the steepest decline among G7 nations.
Lecornu’s Tightrope Walk
Prime Minister Lecornu, a former defense minister with limited economic experience, now faces immense pressure to restore order. His recent offer to delay the controversial pension overhaul until after the 2027 presidential election is widely seen as a survival tactic rather than a strategic economic move .
Yet without a stable majority in the National Assembly, even basic fiscal measures—like passing the 2026 budget—could trigger another government collapse.
Infographic: France’s Economic Pulse Under Political Stress
| Indicator | Pre-Crisis (2023) | Current (Q3 2025) | Change |
|---|---|---|---|
| GDP Growth (Annual) | 1.8% | 0.7% | ↓ 61% |
| Business Investment | +2.1% | -4.2% | ↓ 6.3 pts |
| Unemployment Rate | 7.1% | 7.9% | ↑ 0.8 pts |
| Investor Confidence Index | 112 | 89 | ↓ 20.5% |
What’s at Stake for Europe?
France is the eurozone’s second-largest economy. Prolonged instability in Paris doesn’t just hurt French citizens—it sends shockwaves through Brussels, Frankfurt, and global markets. The European Central Bank has already warned that “fragmentation risks” are rising due to governance gaps in key member states.
Looking Ahead
Unless President Emmanuel Macron can broker a broader coalition—or call early elections—the French economy may remain stuck in limbo. For now, businesses are bracing for more turbulence, and citizens are wondering whether their leaders can finally put politics aside for the sake of prosperity.
